Preamble

The House met at a Quarter before Three of the Clock, Mr. SPEAKER in the Chair.

PRIVATE BUSINESS.

Private Bills [Lords] (Standing Orders not previously inquired into complied with),

Mr. SPEAKER laid upon the Table Report from one of the Examiners of Petitions for Private Bills, That in the case of the following Bills, originating in the Lords, and referred on the First Reading thereof, the Standing Orders not previously inquired into, which are applicable thereto, have been complied with, namely:

National Trust for Places of Historic Interest or Natural Beauty Bill [Lords].

Poole Corporation Bill [Lords].

Bills to be read a Second time.

Provisional Order Bills (No Standing Orders applicable),

Mr. SPEAKER laid upon the Table Report from one of the Examiners of Petitions for Private Bills, That in the case of the following Bills, referred on the First Reading thereof, no Standing Orders are applicable, namely:

Ministry of Health Provisional Order (Birmingham Tame and Rea Main Sewerage District) Bill.
Ministry of Health Provisional Order (Halifax) Bill.
Ministry of Health Provisional Order (Hornsea) Bill.

Bills to be read a Second time To-morrow.

Ashdown Forest Bill [Lords],

Banbury Waterworks Bill [Lords],

Berkshire County Council Bill [Lords],

Hastings Extension Bill [Lords],

Hertfordshire County Council (Colne Valley Sewerage, etc.) Bill [Lords],

Kent Electric Power Bill [Lords],

Pontypool Gas and Water Bill [Lords],

Saint Paul's and Saint James' Churches (Sheffield) Bill [Lords],

Read s Second time, and committed. Ilford Corporation Bill [Lords] (by Order),

Second Reading deferred till Thursday.

Oral Answers to Questions — SCOTLAND.

DEPARTMENTAL REORGANISATION (INQUIRY).

Lieut.-Colonel Sir Thomas Moore: asked the Secretary of State for Scotland whether he is now in a position to state when the report of the Committee which is inquiring into the reorganisation of the Scottish Office and other Departments under his control will be available?

The Secretary of State for Scotland (Mr. Elliot): I understand than the Committee have concluded the heating of evidence and are considering the terms of their report.

GLASGOW POLICE FORCE.

Mr. Anstruther-Gray: asked the Secretary of State for Scotland whether any increase in the strength of the Glasgow Police Force has yet been decided upon following the recommendation to that effect made by the chief constable to the corporation last June?

Mr. Elliot: I understand that the corporation of Glasgow have not yet reached a decision on the recommendation to which my hon. Friend refers. Since last June the strength of the Glasgow Police Force has been increased by one lieutenant, one sergeant and one constable.

SHERIFFS-SUBSTITUTE (SALARIES).

Sir Douglas Thomson: asked the Secretary of State for Scotland whether he is yet in a position to make any statement regarding the salaries of sheriffs-substitute in Scotland?

Mr. Elliot: I have not vet been able, as I had hoped, to conclude my discussions on this subject with my right hon. and learned Friend the Lord Advocate and with the Treasury; but I am actively pursuing the matter, with a view to communicating with the Association of Sheriffs-Substitute at an early date.

Sir D. Thomson: Does not my right hon. Friend think it is time that some decision was come to, as this matter has been under consideration for the last six months?

Mr. Elliot: Recently, as my hon. Friend knows, there have been changes in office, and it has been difficult to pursue connected consideration.

HOUSING (SCOTLAND) ACT, 1925 (VOTING RIGHTS).

Mr. Garro Jones: asked the Secretary of State for Scotland whether he is aware that attempts are being made to impose upon members of local authorities who happen to be tenants of council houses certain restrictions upon voting on matters affecting land, buildings, and houses, if the councillors concerned receive any benefit from such proposals, notwithstanding that such benefits are incidental to benefits derived by the community as a whole, or by a substantial part of the community; that having regard to the fact that in the Housing (Scotland) Act of 1925, the definition of land includes any right over land, presumably including common rights, park rights, etc., and that if Section 107 of that Act is to bear the narrow interpretation now sought to be placed upon it, a large number of municipal voters will be disfranchised upon matters which most directly concern them; and whether, if there is any material doubt as to the meaning of the section referred to, he will take steps to bring it into closer accord with practical considerations?

The Lord Advocate (Mr. T. M. Cooper): As a result of representations addressed to me, a complaint was served on 28th May on a member of Aberdeen Town Council for an alleged contravention of Section 107 of the Housing (Scotland) Act, 1925. I anticipate that this case will be disposed of very shortly, and in these circumstances it would be inappropriate to express any view on the questions raised by the hon. Member.

Mr. Garro Jones: While not wishing to prejudice any favourable outcome of this action, may I ask the Lord Advocate whether he is aware that the representations which he received were made by a political opponent of the councillor in question, and that the motive, rather

than a regard for public integrity, was a political one; and whether he will take what action he can to see that the outcome of this prosecution is in the true public interest?

The Lord Advocate: I have no knowledge of the facts referred to by the hon. Member, but I can assure him and the House that, in deciding to take this prosecution, I was influenced solely by the consideration that, on the information before me, I thought that an offence had been committed.

Mr. Garro Jones: Does the Lord Advocate recognise that this complaint was made by a political opponent on the same council as the councillor in question?

Mr. Speaker: The hon. Member is putting the same question that he put before.

Mr. Garro Jones: May I ask for an answer to that question? It affects my constituency very vitally, and I want a plain answer to the question I put: Does the Lord Advocate realise that the complaint on which he has acted was made by a political opponent of the councillor in question?

The Lord Advocate: No, Sir; I have no knowledge of the political views of the person by whom the complaint was made.

Mr. Garro Jones: Will the right hon. and learned Gentleman find out?

HOUSING (MATERIALS).

Mr. Mathers: asked the Secretary of State for Scotland whether, in view of the embarrassment caused to local authorities in Scotland by the continued increase in the cost of house-building materials, he is now in a position to announce measures to meet the difficulties of the local authorities so that housing schemes may not be further curtailed?

Mr. Kennedy: asked the Secretary of State for Scotland what representations he has received from local authorities regarding recent prohibitive increases in the prices of house-building materials; and what action he proposes to take to meet the need of an increase in the present rates of subsidy for the erection and reconstruction of houses in Scotland?

Mr. Elliot: I have received representations about the increase in the cost of


building materials from the Convention of Royal Burghs, with whose representatives I have discussed the matter personally, and from certain individual authorities. The Department of Health for Scotland are keeping the position very closely under review, but I am not in a position to add anything to the statement which I made on 23rd March in reply to the hon. Member for Linlithgow (Mr. Mathers). As the hon. Members will appreciate, the question is closely bound up with other aspects of the housing situation referred to in that statement and presently under consideration.

Mr. Mathers: Is the right hon. Gentleman aware that there is a very strong desire on the part of the local authorities to have a statement from him; and may we have some indication as to when he is likely to put the local authorities in a position to know exactly where they stand?

Mr. Elliot: I am not aware that the local authorities are very desirous of having a specific statement from me on these points, but I know that they are very desirous of consulting me on these matters, and I am in consultation with them.

Mr. Westwood: Is the right hon. Gentleman aware that, after the economies suggested by his own Department, amounting on an average to £41 per house, the average increase in the cost of housing, as compared with four months ago, is from £45 to £75 per house; and that local authorities are now passing resolutions to stop building until they get an indication of the Government's action to deal with these rising costs of housing?

Mr. Elliot: I am in close touch with the local authorities, and I do not think that they do intend to stop housing.

Mr. Westwood: Oh, yes, they do.

Mr. Kennedy: asked the Secretary of State for Scotland whether his attention has been drawn to the serious shortage of house-building materials in Scotland, involving delay in the completion and extension of housing schemes for the accommodation of slum-cleared and overcrowded tenants; and whether he can account for this shortage on the ground

of any scarcity of raw materials or labour in the industries concerned?

Mr. Elliot: I am not aware that there is any general shortage of building materials in Scotland, though my attention has been drawn to the fact that in some areas there is a shortage of building bricks, involving localised delays in the carrying out of housing schemes. It is also true that there have been temporary shortages of steel rods and galvanised wall-ties, but I am informed that this has not had any appreciable effect on building progress. I have had special inquiries made into the question of brick supply, and I understand that production is likely to be increased in the near future. The shortage in brick supplies is not, I think, due to any scarcity of raw material or labour.

ILLEGAL TRAWLING (PROSECUTION).

Mr. Garro Jones: asked the Secretary of State for Scotland whether his attention has been drawn to an alternative penalty of £200 or six months' imprisonment on Donald Daniel M 'Lean, trawler skipper, of Aberdeen, for illegal trawling off the island of Hoy; whether he has observed that the sheriff principal expressed an unfounded assumption that the fine would be paid by the owners; and whether he will consider a reduction of the fine, in view of the fact that it is so disproportionate to the means of the offender that there is no alternative to a prolonged term of imprisonment?

Mr. Elliot: No petition has been addressed to me about this case, but I have made inquiry in view of the hon. Member's question. I am informed by the sheriff that, before sentence was imposed, he was informed by the accused that he could not look to the owners for payment of the fine, and that they had dismissed him. After careful consideration of the circumstances, including M'Lean's three previous convictions, I regret that I do not feel justified in advising any interference with the sentence in question.

Mr. Garro Jones: Has the right hon. Gentleman seen the Press report purporting to report the sheriff principal as saying that he assumed that the owners would pay this fine; and, having regard to the fact that that statement does not accord with what the right hon. Gentleman has told me, will he make further


inquiries of the sheriff principal with a view to ascertaining whether the fine was, in fact, imposed on an erroneous assumption?

Mr. Elliot: I have made inquiries, and I have first-hand information from the sheriff.

FISHING INDUSTRY.

Mr. R. Gibson: asked the Secretary of State for Scotland whether his attention has been directed to a scheme for settling 300 Scottish fishermen and their families in Vancouver, British Columbia; and whether he has any statement to make regarding the development of salmon fisheries in Scotland with a view to the provision of employment for such fishermen in Scotland?

Mr. Elliot: I am not aware of the adoption of any scheme for settling 300 Scottish fishermen and their families in British Columbia, although I understand that certain proposals emanating from private sources in British Columbia have been received by the Overseas Settlement Board and are under consideration. As regards the second part of the question, any development of the salmon fisheries in Scotland can only be a gradual process, and, while such a development may be possible, I do not think it could provide any substantial addition to employment in the near future.

Mr. Gibson: Does not the right hon. Gentleman consider that, if that gradual process is to receive a start, the appropriate way, and the best way, would be by legislative proposals put forward by the right hon. Gentleman?

Mr. Elliot: I do not think that that arises out of the question on the Paper.

Oral Answers to Questions — COAL INDUSTRY.

WESTLEIGH COLLIERIES.

Mr. Tinker: asked the Secretary for Mines whether he is now in a position to state the intentions of the owners of Westleigh collieries, which closed down on 3rd February; whether they intend to reopen them; and if so, can he give the probable date?

The Secretary for Mines (Captain Crookshank): I have made further inquiry, but there is at present nothing to add to the answer I gave the hon. Member on 29th April.

Mr. Tinker: Cannot the hon. and gallant Gentleman get any definite information from the colliery owners?

Captain Crookshank: I have made inquiries, as the hon. Gentleman hoped I would when he asked his question, but there is nothing yet to report.

PIT-HEAD BATHS.

Mr. Gallacher: asked the Secretary for Mines (1) whether he is aware that three years ago the Valley-field miners voted almost unanimously for pit-head baths; that while the coal in Valleyfield Colliery is high quality coal it is accompanied by a very high percentage of dust; that often the men cannot see beyond two yards; that they must carry dust and soot into their homes where there is not adequate water supply to remove it; and, in view of the fact that the National Welfare Committee is still unable to make an installation at this pit, where one is so urgently needed, will he take steps to arrange a loan to the National Welfare Committee so that all pits still requiring baths can he attended to;
(2) whether his attention has been called to a finding of the Lochore branch of the Fife miners union calling attention to the urgent need of baths at all Fife pits; the apparent neglect of the claim of the Mary pit at Lochore; and will he take up the matter with the National Welfare Committee with a view to immediate installation at all pits where applications have been made?

Captain Crookshank: I am aware generally of the facts referred to in the questions. I understand from the Miners' Welfare Committee that applications for pit-head baths have been received from a number of collieries in the coal district of Fife and Clackmannan, including Valleyfield Colliery and Mary Colliery, Lochore, and that, in accordance with the usual practice, the Committee are dealing with these applications in the order recommended by the Fife District Committee, upon which owners and workmen are equally represented. The building of baths is being greatly expedited by the arrangements explained in my reply to the hon. Member's question on 6th April, and at the moment, at any rate, I do not think that any more rapid progress is practicable, though I shall keep in close touch with the Miners' Welfare Committee in the matter.

Mr. Gallacher: Is the hon. and gallant Gentleman aware that these pits are among the worst in the country from the point of view of dust, and that the district committee is limited in its recommendations to one or two pits, though it would gladly recommend them all if the money was there, and will he not arrange for a loan, which will ensure that all pits will get baths without loss of time?

Captain Crookshank: If the hon. Memcarefully studies my reply he will see that that point is dealt with.

Mr. Paling: Is the rate of progress for building these baths kept up to what was laid down a year or two ago and is the very much increased cost of building material having any bad effect on the rate?

Captain Crookshank: I should likenotice of the latter point but, as regards the first, it has been greatly expedited on what was laid down a year or two ago.

Mr. George Griffiths: Will not the hon. and gallant Gentleman consult the Cabinet as to raising a penny rate? We do not want loans.

Mr. James Griffiths: asked the Secretary for Mines the number of pithead baths to be provided by the Miners' Welfare Fund Committee in 1937; what is the number of baths to be provided for South Wales; whether, in deciding upon the collieries to be provided with baths, the committee gives any preference to collieries with a high incidence of silicosis; and, if not, will he make representations to the committee with that end in view?

Captain Crookshank: The number of pit-head bath installations that can be provided naturally depends upon their size and cost, but the Miners' Welfare Committee has planned to undertake about four a month this year for the whole country. I understand that the 1937 programme includes five installations in South Wales, of which four happen to be in the anthracite area. As regards the third and fourth parts of the question, I understand that in deciding upon the collieries to be provided with baths, the Miners' Welfare Committee is advised by the district committees. I cannot say whether the South Wales

committee gives preference to collieries with a high incidence of silicosis, but I will be pleased to pass on any representations which the hon. Member desires to make on the subject.

Mr. Griffiths: Does the hon. and gallant Gentleman think a rate of progress which provides only five baths in one complete year satisfactory, and will he not expedite it and personally recommend to the Central Welfare Committee that collieries which have a high incidence of silicosis should be given preference?

Captain Crookshank: If I were to do that perhaps the hon. Gentleman will give me the reasons he wishes put forward.

Mr. Griffiths: I will do that, but I thought the reasons had been brought to his attention by the Inspector of Mines.

SUBSIDENCE.

Mr. E. J. Williams: asked the Secretary for Mines whet her he is aware of the serious financial loss sustained by inhabitants of Pontycymmer and Blaengarw, Glamorgan, due to mining subsidence; and whether he will undertake to hold an inquiry with a view to compensating those people who have lost their homes and effects on properties affected?

Captain Crookshank: I have not received any special information in this matter, and, in any case, I am afraid that I have no funds available for the payment of compensation. The answer to both parts of the question, therefore, is in the negative.

Mr. Williams: Is the hon. and gallant Gentleman prepared to consult the Prime Minister with a view to setting up an inquiry because of the serious financial loss incurred by a large number of inhabitants and local authorities in roads and drainage?

Mr. R. Gibson: asked the Secretary for Mines whether he has had under consideration the damage to the houses of owner-occupiers in the Broken Cross district of Hamilton and elsewhere in the Scottish mining coalfield caused by the withdrawal of coal, not from directly underneath the houses, but at a lateral distance of 250 feet or more from the vertical line of such houses; and whether


he has any legislative proposals in view regarding the compensating of such owner-occupiers in respect of such damage?

Captain Crookshank: The answer to both parts of the question is in the negative.

BOYS.

Mr. T. Smith: asked the Secretary for Mines the number of persons under 16 years of age employed underground in the various mining districts at the latest date available?

Captain Crookshank: As the reply involves a number of figures, I will, with the hon. Member's permission, circulate it in the OFFICIAL REPORT.

The information is as follows:


NUMBER OF PERSONS under 16 years of age employed below ground at mines under the Coal Mines Act, 1911, in each mining district of Great Britain as at 12th December, 1936.


District and Number of Persons under 16 years of age.


Northumberland
1,128


Durham
2,946


Cumberland and Westmorland
82


Lancashire and Cheshire
994


Yorkshire, South
2,937


Yorkshire, West
801


Nottinghamshire
773


Derbyshire, North
712


Derbyshire, South
16


Staffordshire, North
407


Cannock Chase
300


Staffordshire, South, and Worcestershire
24


Leicestershire
25


Warwickshire
119


Shropshire
48


Forest of Dean
65


Somersetshire
38


Bristol
2


Kent
177


South Wales and Monmouthshire
4,239


North Wales
186


Fife, Clackmannan, Kinross and Sutherland
335


Lothians (Mid and East) and Peebles
137


Lanarkshire, West Lothian (Linlithgow), Stirling, Renfrew and Dumbarton
451


Ayrshire, Dumfries and Argyll
205


Great Britain*
17,207


* Including particulars in respect of mines under the Coal Mines Act in Cleveland, Lincolnshire and Northamptonshire, which are not included above.

Mr. W. Joseph Stewart: asked the Secretary for Mines the number of fatal and non-fatal accidents to boys between the ages of 14 and 18 employed in the

mines during the night shift, from 10 p.m. to 6 a.m., for the years 1934, 1935 and 1936, respectively?

Captain Crookshank: I regret that it is impracticable to furnish the information asked for.

Mr. Stewart: Surely it should not be an impossible task for the hon. and gallant Gentleman to get the information?

Captain Crookshank: I did not say it was impossible. I said it was impracticable in the time available since the hon. Member put the question down, because it is asking for a great number of figures and I understand, as I wrote to him personally, that it would involve investigating an enormous number of returns. Perhaps if he will give me a little time I will see what can be done.

Mr. Stewart: Can the hon. and gallant Gentleman give me an answer in a week's time?

Captain Crookshank: Perhaps the most convenient way would be to let me inform the hon. Member.

Mr. Stewart: asked the Secretary for Mines the number of fatal and non-fatal accidents to boys from 14 to 18 years of age employed in and about the mines in this country in each year from 1930 up to 1936?

Captain Crookshank: As the reply involves a number of figures I will, with the hon. Member's permission, circulate it in the OFFICIAL REPORT.

The information is as follows:


GREAT BRITAIN.


Accidents to persons under 18 years of age at mines under the Coal Mines Act, 1911.


Year.
Number Killed.
Number Injured (disabled for more than three days).


1930
65
18,044


1931
61
15,171


1932
52
12,077


1933
51
11,702


1934
47
11,937


1935
58
13,054


1936
55
14,057

WORKMEN'S INSPECTORS.

Mr. Sexton: asked the Secretary for Mines whether he will give facilities for the extension of the powers of inspectors


appointed by the workmen under Section 16 of the Coal Mines Act of 1911, so that workmen may be withdrawn from any part of a mine when, in the opinion of the local mines inspectors, there is a breach of the Coal Mines Regulation Act and/or there is danger, from whatever cause, to any workmen?

Captain Crookshank: The question of the appropriate powers to be assigned to workmen's inspectors is under the consideration of the Royal Commission, and I must await their report.

LEGISLATION.

Mr. Attlee: (by Private Notice) asked the Prime Minister whether he can now make a statement on the subject of coal legislation?

The Prime Minister (Mr. Chamberlain): It was the desire and intention of His Majesty's Government that the legislation necessary to give effect to their proposals for the unification of coal royalties under public control should be introduced and carried into law during the present Session of Parliament. The House will remember that on 26th April, in announcing the Government's acceptance of the findings of the tribunal on the global purchase price of the royalties, the Prime Minister said that it was the intention to introduce the necessary legislation as soon as possible. It has, however, unfortunately become clear that the state of Parliamentary business will not permit of the passage of this Measure, which will inevitably be lengthy and complicated, during the present Session.
An alternative form of procedure is, however, possible, which will, I hope, obviate any serious delay. The unification of coal royalties must inevitably involve a great deal of preliminary work—in particular, the ascertainment of existing proprietary interest in coal and associated rights. The Government have accordingly decided that this preliminary work shall be proceeded with at once by means of a Bill to provide for the collection and registration of particulars concerning the units of separate ownership of coal and associated rights, and of existing working leases. It will be obvious that this task is an essential part of any scheme for the unification of the property concerned; and that such

progress as can be made towards its completion will pro tanto shorten the period required for collecting information and assessing individual claims for compensation under the main Bill. It is intended, therefore, that a Bill providing the machinery for this purpose shall be introduced in another place almost at once, and I hope that it will be possible for it to become law before the Summer Recess. The main Bill embodying the coal policy of the Government will be introduced at the beginning of next Session, with a view to its passage into law before the end of the present year.

Mr. George Hall: Is it the intention of the Government to proceed with the Coal Mines Reorganisation Bill introduced some three or four months ago?

The Prime Minister: The main Bill, as I have already said, will be introduced next Session.

Mr. Michael Beaumont: Will the right hon. Gentleman be very careful to see that nothing in the first Bill ties the hands of this House on the principles of the main Bill when it comes before us?

Sir Archibald Sinclair: Is it clear that the main Bill will include both the unification of coal royalties and the reorganisation of the industry?

The Prime Minister: I cannot add anything about the contents of the Bill which will not be introduced until next Session.

Mr. Shinwell: On the principle embodied in the Bill to which the right hon. Gentleman refers, do we understand from his statement that all that is intended in the Bill to be introduced in another place is the collection of information in preparation for the major Bill which will be subsequently introduced in this House?

The Prime Minister: I thought I had made it pretty clear in my original reply that the collection and registration of particulars concerning the units of separate ownership of coal and associated rights and of existing working leases will be dealt with in that Bill. That originally would have been part of the main Bill, but as we cannot get the whole Bill through, we are doing that part of the Bill now so as to save time later.

Mr. Tinker: On a point of Order, did I understand the Prime Minister to say that we should delegate some of our


powers to the House of Lords and that they would introduce a Bill on this matter? Have we the right to give the House of Lords power to introduce a Bill from this House which we have to deal with afterwards?

Mr. Speaker: That is a procedure which is very often adopted. It happens in many cases that a Bill is introduced first in the House of Lords and comes here afterwards.

Mr. David Grenfell: Will the right hon. Gentleman assure the House that while legislation is to be brought in to collect information, nothing in the statement of the Government is to be taken to indicate that they are to modify or change in any way the award of the Tribunal?

The Prime Minister: That is so.

Mr. H. Morrison: Can the right hon. Gentleman inform the House whether the statement he has made covers in any way the future of the Coal Mines Reorganisation Bill which was introduced by the last President of the Board of Trade and dropped?

The Prime Minister: I said that there was no change in the plan of the Government except on the point of time.

Mr. Attlee: The difficulty is that there was a change in the plans of the Government owing to the Bill having been introduced by the President of the Board of Trade, emasculated and then withdrawn. What we want to know is whether the legislation is to fulfil the original programme of the Government in respect of the reorganisation of this industry.

The Prime Minister: There is not any alteration in the position as it was last stated in this House, except on the point of time.

Oral Answers to Questions — PAN-AFRICAN CONFERENCES.

Mr. Creech Jones: asked the Secretary of State for Dominion Affairs, whether any representatives of the British dependencies in South Africa have attended the meetings of Pan-African Conferences held in Johannesburg in 1935 and 1936; what is the nature and purpose of these conferences; and whether any secretariat exists to summon future conferences or to carry on work in the intervals.

The Secretary of State for Dominion Affairs (Mr. Malcolm MacDonald): The meetings of the Pan-African Health and Transport Conferences held at Johannesburg in 1935 and 1936 respectively were attended by representatives of Southern Rhodesia and of Basutoland, the Bechuanaland Protectorate and Swaziland. The purpose of the Pan-African Health Conference, convened by His Majesty's Government in the Union of South Africa under the auspices of the Health Committee of the League of Nations, was to continue the work done at a previous conference held in 1932 of considering problems relating to diseases affecting the various countries of Africa. The general purpose of the Pan-African Transportation Conference was to consider technical and other questions relating to rail, road and air transport, with a view to the elimination of uneconomic overlapping of services. With regard to the last part of the question, I understand that this matter is now being considered by the various authorities concerned.

Mr. Creech Jones: Is it intended to extend the scope and purpose of the conference so as to cover considerations of land and native policy?

Mr. MacDonald: I am not aware of any suggestion to that effect. The whole question of setting up machinery and the continuation of these discussions is under consideration by the authorities at the moment.

Oral Answers to Questions — SOUTHERN RHODESIA (NATIVES).

Mr. Creech Jones: asked the Secretary of State for Dominion Affairs whether his attention has been drawn to the fact that ignorance is one of the main causes of the high proportion of convictions of natives in Southern Rhodesia; and whether any steps are being taken to dissipate this ignorance and to make known to the natives, in some simple form in their own language, the main provisions of the Natives' Registration Act.

Mr. M. MacDonald: I am informed that the officials of the Native Affairs Department in all the native districts and sub-districts of Southern Rhodesia have been instructed to explain to the natives the provisions of the Natives' Registration Act. In addition the main provisions


have been published in English and native languages in the newspapers with the largest circulation amongst native readers.

Mr. Creech Jones: Will the right hon. Gentleman take steps to inform the South Rhodesian Government, in view of the fact that many natives drift into these colonies from other colonies and display ignorance, that it is very necessary that these new rules and regulations should continuously be brought to the notice of the natives?

Mr. MacDonald: I am certain that the South Rhodesian Government will take any steps that may be necessary to see that natives in the territory are made aware of the provisions of the Act.

Mr. Creech Jones: asked the Secretary of State for Dominion Affairs whether his attention had been drawn to the publicly-expressed fears that the Natives' Registration Act of Southern Rhodesia will lead to a substantial increase in native convictions under the pass laws; whether, before his approval was given to this legislation, any estimate was made of the number of convictions likely to take place under the Act; and whether, seeing that the latest figure of 20,000 convictions is likely to be exceeded, he is satisfied that adequate prison accommodation has been, or will be, provided before the Act comes into operation.

Mr. MacDonald: I am informed that the Southern Rhodesia Government do not regard the fears referred to in the first part of the question as well-founded. The Southern Rhodesia Government have been seriously perturbed for some years by the number of natives who have been convicted for offences,and it is hoped that the new Act will help in reducing the number of such convictions which has been increased by a growing tendency among natives of undesirable character to crowd into the towns.

Mr. Creech Jones: Will the right hon. Gentleman pass on to the South Rhodesian Government that the surest way to reduce convictions is by modifying the pass laws?

Mr. Paling: In view of the fact that the legislation creates new crimes, is it likely that convictions will be reduced? How long is it likely to be before all the natives are or have been in prison?

Mr. MacDonald: This legislation does not create any considerable number of new crimes. In the main it is a consolidation of existing legislation which has been in force for many years. Far from creating new crimes, it in some respects modifies old offences in a direction which should reduce convictions.

Mr. Lunn: Are we to take it that the right hon. Gentleman supports this policy?

Mr. MacDonald: I have answered that question before, and made the position of the Government quite clear.

Oral Answers to Questions — TRADE AND COMMERCE.

IRON ORE, AUSTRALIA.

Mr. Ellis Smith: asked the President of the Board of Trade whether he has considered the letter from Mr. J. W. Bell, of 40, Coronation Street, Victoria, Australia, dealing with the exploitation of the Yampi Sound and Blythe River iron-ore deposits and asking if negotiations are taking place to enable a company to mine and ship a million tons of iron ore per year to Japan; and what was the nature of the reply sent to Mr. Bell?

The President of the Board of Trade (Mr. Oliver Stanley): Yes, Sir. The letter to which the hon. Member refers has been considered, and I am sending him a copy of the reply sent to Mr. Bell.

ROAD-MAKING MATERIALS (IMPORTS).

Sir Cooper Rawson: asked the President of the Board of Trade whether, in view of the fact that the imports of crushed macadam and chippings from Norway and Belgium have increased from 875 tons in January to 9,333 tons in February, some further effort will now be made to induce local authorities to use British materials, of which there are large supplies lying idle?

Mr. Stanley: The Ministry of Transport have urged upon local authorities the desirability of using British materials to the maximum possible extent for road-making, and one of the conditions of a grant from the Road Fund is that all materials should, so far as practicable, be of United Kingdom origin. Imports of foreign macadam are small compared with home production.

Mr. Rathbone: Is my right hon. Friend aware that from the figures the imports


for February of this year were higher than those for any month of last year; and in view of the great supplies available at reasonable prices in Cornwall and elsewhere, will he give the matter his very serious consideration?

Mr. Stanley: It is quite true that the imports for February were high, but, even so, they only stand at something like 9,000 tons compared with the average of home production of 750,000 tons.

Mr. Herbert Morrison: If any steps are taken to restrict foreign imports, can the Minister give an undertaking that the Government will see to it that British producers will not make price rings against the interests of the local authorities?

Mr. Stanley: That question is doubly hypothetical.

Sir C. Rawson: Is my right hon. Friend aware that certain local authorities or surveyors have actually specified for the supply of Norwegian materials as against British?

Mr. Stanley: If my hon. Friend has any information of that kind, I shall be glad if he will bring it to my attention.

ANGLO-SPANISH CLEARING OFFICE.

Colonel Sandeman Allen: asked the President of the Board of Trade why the Anglo-Spanish Clearing Office is holding up funds amounting to between £1,500,000 and £2,000,000 sterling due to creditors in the United Kingdom; and when this money is likely to be distributed to the creditors entitled to receive it who are suffering serious difficulties and hardships through lack of capital represented by such funds?

Mr. Stanley: The distribution of the funds held by the Anglo-Spanish Clearing Office is suspended in consequence of difficulties which have arisen as the result of the civil war in Spain. I fully realise the desirability from the creditors' point of view of distributing this money at an early date, but I cannot at present say when it will be possible to do so.

Colonel Sandeman Allen: Is my right hon. Friend aware that chambers of commerce, who are fully aware of the difficulties that he has pointed out, have expressed their firm opinion that such difficulties can easily be overcome, and should be overcome swiftly?

Mr. Stanley: I will certainly see if there is anything that can be done to hurry up this matter. I realise the difficulty of those who are owed money under this Agreement.

Mr. Petherick: Can my right hon. Friend offer any valid reason to the House why the exporters of goods to Spain, enjoying the protection of the Anglo-Spanish Clearing Office, should fail to receive their money even temporarily during a civil war in Spain for which they have no responsibility whatever?

ANGLO-ITALIAN CLEARING AGREEMENT.

Mr. Petherick: asked the President of the Board of Trade how many firms in the United Kingdom, having sold goods to Italy the payment for which is covered by the Italian Clearing Agreement, have received payment at a lower rate of exchange than was provided for in the agreement, thus losing money to which they were entitled; what are the total amounts of such losses; and what steps have been taken by the Italian Government to enforce its decree which ordered the Italian consignees of the British goods involved to make good the differences in exchange?

Mr. Stanley: I presume my hon. Friend refers to the transfer of debts covered by the Payments Agreement of 1935. The Anglo-Italian Clearing Agreement of November last provides that these debts shall be transferred at the rate current on the date when transfer is notified to the United Kingdom Clearing Office, but it falls to the debtors to make supplementary deposits of lire to cover the exchange differences resulting from the devaluation of the lira. Therefore, although the creditor receives in the first instance only the equivalent of the original deposit, it does not follow that the balance is to be regarded as a loss. In fact, considerable sums have already been transferred in respect of supplementary deposits and it is, I think, premature to attempt to estimate the amount likely to remain unpaid. As regards the last part of the question, I understand that the Italian authorities have instructed Italian banks to notify the debtors of their obligations in the matter under Italian law.

Mr. Shinwell: Will the right hon. Gentleman take note that there is no civil war in Italy as far as can be ascertained,


and no excuse for the Italian Government not meeting their financial obligations?

Mr. Stanley: I think that the hon. Member is under a complete misapprehension. If he will read the answer to the question, he will see that the additional sum due to the depreciation of the lira has nothing whatever to do with the Italian Government. The matter was discussed at some length in general last week, and if he will refer to the report he will be able to refresh his memory.

Mr. E. J. Williams: Is it not the fact that the Italian Government still own a considerable amount of money for Welsh and Durham coal?

Mr. Stanley: Perhaps the hon. Member will put that question upon the Paper.

Mr. Shinwell: Are we to understand that the Italian Government have no control over Italian traders?

Mr. Stanley: It is a matter of civil liability between traders of one country and traders of another.

RUSSIA.

Mr. Thorne: asked the President of the Board of Trade what was the total value of the orders placed by the Soviet trading organisation in the first four months of this year as compared with the January to April period of the preceding year; and whether the £10,000,000 credit agreement is proceeding satisfactorily?

Mr. Stanley: I have no information as to the value of the orders placed for United Kingdom goods, but according to a statement published by the Soviet Trade Delegation the total value of the orders placed in the United Kingdom by Soviet trading organisations in the period January to April, 1937, was £8,611,000 as compared with £3,088,000 in the corresponding period of 1936. The answer to the latter part of the question is in the affirmative.

Mr. Thorne: Am I to understand from the answer of the President of the Board of Trade that officially the Board of Trade keep no records of trade between this country and Soviet Russia?

Mr. Stanley: I cannot answer that question from day to day as it arises. They are kept only for specific periods.

Mr. Bellenger: Can the right hon. Gentleman say whether in this case the Soviet Government, or the appropriate body responsible for these goods, are meeting their obligations satisfactorily?

Mr. Stanley: So far, Yes, Sir.

INDIA.

Mr. Chorlton: asked the President of the Board of Trade what progress has been made with the Indian trade agreement negotiations; and whether the increased take of Indian cotton by Lancashire will be taken into account?

Mr. Stanley: As regards the first part of the question, I would refer my hon. Friend to the answer which was given to him by my predecessor on 19th April. As regards the second part, I will certainly bear this in mind.

Mr. Chorlton: What steps are being taken by the Minister to see that properly accredited trade representatives are attached to the delegations?

Mr. Stanley: As that is rather a different question perhaps my hon. Friend will put it upon the Paper.

TEXTILE INDUSTRIES (LANCASHIRE)

Mr. Chorlton: asked the President of the Board of Trade what is the position with regard to the enabling Bills proposed for different textile industries in Lancashire; and whether separate Bills or a general enabling Bill will be introduced, and when?

Mr. Stanley: I am not at present in a position to make any statement.

NATIONAL EMBLEMS (IMPORTS).

Mr. Day: asked the President of the Board of Trade the number of pocket mirrors imported into this country during the six months ended to the last convenient date displaying pictures on the back thereof depicting the royal coach leaving Buckingham Palace and flying the Union Jack, upside down, together with the lion and unicorn, with the words "Coronation Day, May 12th, 1937," and also stamped "Foreign," having been made in Germany and supplied by manufacturers in Dusseldorf; and will he consider introducing legislation that will prohibit in future the import into this country of such merchandise bearing purely national emblems?

Mr. Stanley: The information asked for in the first part of the question is not available. The answer to the second part of the question is in the negative; but I would remind the hon. Member that Coronation souvenirs imported from foreign countries are subject to an import duty of 100 per cent. ad valorem.

Mr. Day: Will the right hon. Gentleman consider making a regulation that the word "Foreign" should be imprinted on these souvenirs and not put on with a rubber stamp which could be easily rubbed off?

Mr. Stanley: That is a matter which comes under the machinery of the Merchandise Marks Act, and I will certainly look into it.

Oral Answers to Questions — FOOD STORAGE.

Mr. De la Bère: asked the President of the Board of Trade whether he is now in a position to make some statement regarding the storage of food in the event of national emergency?

Mr. Stanley: No, Sir. I regret that I am not able to make a statement on the matter at the present time.

Mr. De la Bère: Is not the right hon. Gentleman aware of the very widespread concern throughout the country that nothing has been done up to this date; and does not he think that it is about time something was done to prevent the possibility of ruin in the event of a national emergency?

Hon. Members: Answer!

Mr. Stanley: I should hesitate to do anything to deprive my hon. Friend of his daily avocation.

Oral Answers to Questions — COST OF LIVING.

Mr. Tinker: asked the Prime Minister whether he will consider giving a day to discuss the increased cost of living and the bearing it has on the fixed incomes, such as those on unemployment benefit and old age pensions, with a view to raising such incomes to meet the increase?

The Prime Minister: I fear I can hold out no hope of a special opportunity being afforded for the discussion of this subject.

Mr. Tinker: Is the right hon. Gentleman aware that wherever one goes and at every meeting one attends the question is put to us as to what we are going to do about this matter? Cannot he give u a date for discussion so that the whole facts may be brought before the House?

The Prime Minister: There are other opportunities of raising the matter.

Captain Harold Balfour: Is it not a fact that the cost of living index for the first quarter of this year is 13.0 below that of 1930, and that unemployment assistance averaged 5s. 6d. more than it did in 1930, when the Labour Government were in office?

Mr. Shinwell: Is it not equally true that as a result of the reduction in the unemployment figures, for which the Government claim credit, there has been a lessened expenditure in unemployment assistance?

Mr. Tinker: In view of the seriousness of this matter, I beg to give notice that I shall raise it on the first available opportunity on the Adjournment.

Oral Answers to Questions — GAS GRID SYSTEM.

Mr. Messer: asked the President of the Board of Trade what progress has been made in the utilisation of supplies of coke-oven gas since the report of the National Fuel and Power Committee in 1928, naming particular areas which are being developed with supplies of coke-oven gas and giving prices charged to consumers for gas in these areas; and what progress has been made in the development of a gas grid system?

Mr. Stanley: The quantity of gas bought by authorised gas undertakings from owners of coke ovens in 1927 was upwards of 5,000,000 thousand cubic feet. In 1936 the quantity so bought exceeded 24,000,000 thousand cubic feet. I will, with the hon. Member's permission, circulate in the OFFICIAL REPORT a table showing the undertakings which purchased coke-oven gas in 1936, together with the quantities purchased and the prices charged. The recommendation of Area Gas Supply Committee which considered the question of a gas network was that one should be instituted in the Sheffield district. This has been done and


the quantity of coke-oven gas bought by the Sheffield Gas Company has increased from less than 2,000,000 thousand cubic feet in 1927 to more than 8,000,000 thousand cubic feet in 1936.

Mr. Shinwell: Is the right hon. Gentleman aware that the only gas grid system is in the Sheffield area, and that there is ample reason why a gas grid should be constructed in other parts of the country?

Quantities of Coke Oven Gas bought by authorised Gas Undertakings in 1936, with some particulars of the prices per therm charged by those Undertakings to their consumers.


Purchasing Undertaking.
Quantity of coke oven gas purchased.
Price in 1935 in main area of supply.


Highest price to ordinary consumers.
To domestic consumer of 100 therms per annum.
To domestic consumer of 500 therms per annum.
To industrial consumer of 5,000 therms per annum.


1.
2.
3.
4.
5.
6.



1,000 cubic feet.
d. per therm.
d. per therm.
d. per therm
d. per therm.


England and Wales.







Accrington District Gas and Water Board.
618,318
10·5
9·5
9·25
7·0


Ackworth, Featherstone, Purston and Sharlston Gas Company.
46,043
12·0
11·78
10·22
10·22


Burnley Corporation
544,509(½)
7·0
7·0
6·0
5·13


Castleford and Whitwood Gas Light and Coke Company.
178,761
9·8
9·3
8·3
5·0


Chesterfield Corporation
343,368(½)
10·0
7·3
6·26
4·0


Clay Cross Gas Company, Limited.
101,072
10·63
10·63 &amp; 9·38
9·06
5·0


Derby Gas Light and Coke Company.
1,442,163(⅔)
7·0
7·0
6·82
4·75


Eckington and Mosborough Gas Company, Limited.
36,500
12·5
12·5
6·25
6·25


Garw and Ogmore Gas Company.
24,365
16·94
14·85
13·l4
—


Gas Light and Coke Company
825,068
8·6
8·6
8·6
6·78


Haslingden Union Gas Company.
53,088
14·0
14·0
14·0
—


Houghton-le-Spring District Gas Company.
89,246
9·5
8·78
7·6
6·33


Kettering Gas Company
231,192
9·78
9·78
9·78
6·0


Kidsgrove Gaslight Company
53,906
13·2
13·2
11·0
11·0


Mansfield Corporation
307,877
9·9
9·9
9·69
7·37


Marsden Urban District Council.
104
7·3
7·3
6·3
5·7


Middlesbrough Corporation
1,299,864
4·7
4·7
4·3
3·3


Mirfield Gas Company
43,906(⅓)
1·0
10·8
9·96
4·25


Newcastle-upon-Tyne and Gateshead Gas Company.
3,050,723(½)
7·8
7·8
4·9 to 7·8
6·1


Nottingham Corporation
735,836(¼)
7·2
7·2
7·0
6·2


Ossett Corporation
152,704
10·11
10·11
9·09
8·59


Pontypool Gas and Water Company.
217,130
12·5
12·5
12·5
5·33


Pontypridd Urban District Council.
160,069
10·65
10·65 &amp; 10·0
10·65 &amp; 10·0
8·04


Rawmarsh Urban District Council.
87,913
8·4
8·4
7·8
7·8


Redcar Corporation
192,912
10·0
10·0
9·5
9·0


Rhymney and Aber Gas Company.
259,806
12·2
12·2
12·2
5·65

Mr. Stanley: That is not the opinion of the Area Gas Supply Committee which considered the question. The only recommendation they made of a gas grid was in the Sheffield area, and that has been done.

Mr. Shinwell: That report was issued in 1928, and much progress has been made since then.

Following is the table:

Purchasing Undertaking.
Quantity of coke oven gas purchased.
Price in 1935 in main area of supply.


Highest price to ordinary consumers.
To domestic consumer of 100 therms per annum.
To domestic consumer of 500 therms per annum.
To industrial consumer of 5,000 therms per annum.


1.
2.
3.
4.
5.
6.


England and Wales.—contd.
1,000 cubic feet.
d. per therm.
d. per therm.
d. per therm.
d. per therm.


Rotherham Corporation
1,071,347
7·2
7·2
7·2
3·6


Rothwell Gas Light Company.
67,569
10·45
10·45
10·26
9·62


Royston and Brodsworth Gas Company.
125,629(½)
10·6
10·6
9·5
4·5


Sheffield Gas Company
8,361,460
6·6
6·6
6·6
4·8


Shirebrook and District Gas Company.
78,313
11·0
10·0
8·0
6·4


South Yorkshire and Derbyshire Gas Company.
282,981
11·2
7·5
7·5
4·0


Stocksbridge Gas Company
65,141
7·2
6·88
5·74
4·4


Stoke-on-Trent Corporation
920,324(⅓)
7·45
7·45
6·81
6·38


Sunderland Gas Company
578,571(⅓)
6·0
6·0
6·0
5·6


Swinton and Mexborough Gas Board.
736,222
13·8
13·8
12·42
6·0


Tudhoe and Sunderland Bridge Gas Company.
11,772
4/3 per 1,000 c.f.
4/3 per 1,000 c.f.
4/1 per 1,000 c.f.
3/6 per 1,000 c.f.


Wath, Bolton and Thurnscoe Gas Board.
114,415
12·4
10·2
7·4
6·0


Wombwell Urban District Council.
91,939
11·55
11·55
10·9
6·89


Worsbroughdale and Worsbrough Gas Light and Coke Company, Limited.
28,340
9·37
9·37
9·37
9·37


Scotland.







Glasgow Corporation
671,106
8·09
Not available
3·4


Total
24,301,632






In most cases all, or nearly all, the gas sold by the undertaking is purchased from coke ovens. Exceptions are indicated by a suffix number in brackets which represents the approximate proportion of total gas sold which is purchased from coke ovens. In the case of the Gas Light and Coke Company the Marsden Urban District Council and the Glasgow Corporation the quantity purchased is very small in comparison with total supply.


Column 6 does not necessarily show the lowest price charged to industrial consumers.

Oral Answers to Questions — BRITISH ARMY.

CIVILIAN WORK (TRAINING).

Sir Robert Young: asked the Secretary of State for War how many soldiers are, or have been, in course of training for civilian work with W. Alexander and Sons, Camelon, Scotland; whether the firm receives any remuneration for such training; if so, what is the amount paid to them per week; whether there is any deduction from the military pay of the trainees; what is the amount of this deduction; and is the deduction, if any, paid to the firm in question and to other firms?

The Secretary of State for War (Mr. Hore-Belisha): The answer to the first part of the question is "7"; to the second part "none"; the third part does

not arise; to the remaining parts, "there is no deduction."

GUN FACTORY, NOTTINGHAM.

Mr. Markham: asked the Secretary of State for War what are the numbers now employed at the Nottingham Gun Factory; when it is expected it will be in full production; and whether there has been any unexpected delay in securing machinery or material?

Mr. Hore-Belisha: The answer to the first part is "462"; to the second "I cannot say"; and to the third "No."

Mr. Markham: Owing to the very great local interest as to what the plans of the War Office are in regard to this matter, will my right hon. Friend consider making


a public statement in the near future, saying when it is proposed to begin full production here, and when it is likely to extend the existing staff?

Mr. Hore-Belisha: I am informed that the production is steadily increasing. If my hon. Friend desires any further information that I can give him, I will willingly send it to him.

Mr. Markham: Is the Minister aware that it has been stated in this House that this factory will not be in full production until about 2,000 men have been engaged? Seeing that his statement to-day shows that only 462 have been engaged, how can that be reconciled with his other remarks?

Mr. Hore-Belisha: My statement is that production is steadily increasing and, further, that I will send to the hon. Member any other particulars that I can.

MUNITIONS FACTORY, BRIDGEND.

Mr. E. J. Williams: asked the Secretary of State for War the number of persons employed at the Bridgend munitions factory and the sources of recruitment?

Mr. Hore-Belisha: No War Department employes are at present at Bridgend.

Mr. Williams: Except the technicians, can the right hon. Gentleman give an undertaking that all the other labour will be recruited from the locality?

Mr. Hore-Belisha: As this building will he under the direction of the Office of Works, perhaps any other question had better be addressed to my right hon. Friend.

Mr. E. J. Williams: asked the First Commissioner of Works whether the workmen engaged in preparatory work at Bridgend munitions establishment are paid in accordance with the fair-wages clause for the district and the rates paid for the various grades of labour engaged?

The First Commissioner of Works (Sir Philip Sassoon): None of my Department's own workmen are engaged on the work referred to. Part of it is being executed by contractors, and the terms of the contracts include the usual fair-wages clause, which prescribes that the rates of wages paid and the terms of labour observed shall not be less favour-

able than those commonly recognised or prevailing among good employers in the trade in the district where the work is being carried out. I have no grounds for thinking that the requirements of the clause are not being observed in these cases. The remainder of the preparatory work now being carried out is being undertaken by the Great Western Railway, who are paying labourers engaged upon it at the rate of 45s. a week, less per cent., which I understand to be the recognised rate in the Bridgend district for work of this nature in the railway industry.

Mr. Williams: Are the Great Western Railway recruiting local labour for this purpose?

Sir P. Sassoon: There are only about 17 men employed on the job, and certainly local labour will be employed as far as possible.

TIMBER SUPPLIES.

Mr. Day: asked the Secretary of State for War from which countries the timber was purchased that was used by his Department during the 12 months ended to the last convenient date?

Mr. Hore-Belisha: With the permission of the hon. Member I will circulate the information in the OFFICIAL REPORT.

Following is the information:

During the 12 months ended 31st May, 1937, contracts were placed at the War Office for timber from the following countries:

British Borneo.
British Honduras.
Burma.
Canada.
Finland.
France.
Gold Coast.
Great Britain.
Latvia.
Nigeria.
Poland.
Russia.
Sweden.
United States of America.

The countries of origin of timber used in building works executed by contract, and of the comparatively small quantities purchased in Commands at home and abroad, are not recorded at the War Office.

ROYAL ARMY MEDICAL CORPS OFFICERS.

Mr. Day: asked the Secretary of State for War whether there is any shortage existing at the present time in the establishment of the officers of the Royal Army Medical Corps; and can he state the reason for same?

Mr. Hore-Belisha: A deficiency of 63 regular Royal Army Medical Corps officers on the present authorised establishment is being made good by 33 temporary commissioned officers, and a number of civilian medical practitioners. The number of candidates presenting themselves continues to improve.

Mr. Day: Can the right hon. Gentleman answer the last part of the question?

Mr. Hore-Belisha: I cannot give an authoritative answer upon that.

Oral Answers to Questions — LEAGUE OF NATIONS (BURMA).

Mr. Mander: asked the Under-Secretary of State for Burma the position with regard to Burma's membership of the League of Nations, in view of the separation of Burma from India; and whether Burma is now a separate member of the League or intends to apply for membership?

Lieut.-Colonel Sir A. Lambert Ward (Treasurer of the Household): I have been asked to reply. In view of the separation of Burma from India, Burma cannot continue to be represented at Geneva by India. Arrangements have, however, been made for her to participate in the affairs of the League of Nations through His Majesty's Government in the United Kingdom, and in appropriate cases for her to be specially represented upon the delegations of that Government. It is not proposed to apply for separate membership of the League for Burma.

Oral Answers to Questions — AVIATION (NOTTINGHAM).

Mr. Kelly: asked the Under-Secretary of State for Air whether he will take steps to see that the interests of the Tollerton Aero Club and the Nottingham Flying Club are not injured by any order which he may make?

The Under-Secretary of State for Air (Lieut.-Colonel Muirhead): Notice has recently been given of the intention to

hold a public inquiry in regard to the Nottingham (Tollerton) Compulsory Purchase Order in accordance with paragraph 4 of the First Schedule to the Air Navigation Act, 1936. It will be open to any interested parties to attend this inquiry and submit evidence concerning their objections to the order.

Mr. Kelly: Has any date been fixed for the public inquiry?

Lieut.-Colonel Muirhead: I cannot give the hon. Member the date.

Mr. Kelly: asked the Under-Secretary of State for Air whether he is aware that provisional arrangements were made with Marshall's Flying School for the establishment of a reserve training school at Tollerton without the consent or knowledge of the Nottingham Airport, Limited, who are the lessees; and whether this is the method generally adopted when establishing reserve training schools?

Lieut.-Colonel Muirhead: Marshall's Flying School were approached in connection with the formation of a Volunteer Reserve training centre at Tollerton on the understanding that it would be possible to arrange for a lease of the necessary flying rights at the aerodrome and to erect the usual buildings. Subsequently the Nottingham Corporation made a compulsory purchase order, not yet confirmed, for the acquisition of the lease of flying rights at the aerodrome which Nottingham Airport, Limited, hold, and in view of this development the negotiations with Marshall's Flying School ceased and the question of the establishment of a school at Tollerton is in abeyance. As regards the second part of the question, the method adopted by the Department in establishing training schools depends on the circumstances of each case.

Mr. Kelly: Why was it that the local people who were already well established there for training purposes were not asked to tender for the establishment of this flying school? Why was it that another school from a distance was brought in for that purpose, to the disadvantage of the local people?

Lieut.-Colonel Muirhead: Not until the negotiations started for taking over the ground from the Nottingham Corporation was it discovered that the Nottingham airport were the lessees. Actually, the


people who are to be asked to establish a training school must depend on whom the Secretary of State thinks are fit and proper persons.

Mr. Kelly: asked the Minister of Health the price paid by the Nottingham City Council for the land adjoining the aerodrome at Tollerton; and what was the rateable value of this land at the time of purchase?

The Parliamentary Secretary to the Ministry of Health (Mr. Bernays): The price was £14,157 for 322 acres. As the land was agricultural, it had no rateable value.

Mr. Kelly: Can the hon. Member say when this transaction took place and when approval was given by the Minister?

Mr. Bernays: I understand that the price was recommended by the district valuer, and that my right hon. Friend gave his decision on 14th April.

Oral Answers to Questions — UNEMPLOYMENT.

ASSISTANCE.

Mr. T. Smith: asked the Minister of Labour whether, in view of the increasing cost of living, the Unemployment Assistance Board contemplate the introduction of more generous unemployment assistance regulations?

The Parliamentary Secretary to the Ministry of Labour (Mr. Butler): I would refer the hon. Member to the reply given by my right hon. Friend to similar questions put to him on 8th April last.

BUILDING INDUSTRY (SCOTLAND).

Mr. Kennedy: asked the Minister of Labour the number of unemployed masons, bricklayers, and other workers connected with the house-building industries in Scotland at the last date for which figures are available?

Mr. Butler: As the reply includes a table of figures will, if I may, circulate a statement in the OFFICIAL REPORT.

Following is the statement:

The total number of insured persons, aged 14 to 64 years, in the building industry, recorded as unemployed at Employment Exchanges in Scotland at 19th April, 1937, was 13,614, of whom 12,794

were men aged 21 to 64 years, 723 were youths and boys under 21 years, and 97 women and girls. The numbers of unemployed men, aged 21 to 64 years in the various occupations were as follow:


Occupation.
Number


Carpenters
781


Bricklayers
69


Masons
409


Slaters and Tilers
333


Plasterers
149


Painters
692


Plumbers
475


Labourers to above and Builders' Labourers
2,977


Navvies, etc., and General Labourers
3,716


All other occupations
3,193


Total, aged 21–64 years
12,794

Separate figures in respect of the house-building section of the industry are not available.

Oral Answers to Questions — IMPERIAL CONFERENCE.

Mr. Mander: asked the Prime Minister whether the present Imperial Conference is considering the best means of making individual and joint contributions, both economic and military, to the collective system of the League of Nations and for the purpose of carrying out the obligations of Great Britain and the Dominions under the Covenant?

The Prime Minister: The Imperial Conference is reviewing all aspects of foreign affairs which are of common concern including those relating to the League of Nations.

Oral Answers to Questions — GOLD POLICY.

Mr. Liddall: asked the Chancellor of the Exchequer whether he will propose control of the output of gold or, alternatively, discuss its demonetisation as a remedy against the dangers following accumulations annually of £250,000,000 of fresh raw gold which two signatories to the tripartite agreement are now compelled to buy and put out of use to prevent unsettlement of trade?

The Chancellor of the Exchequer (Sir John Simon): The answer is in the negative.

Mr. Liddall: Does the right hon. Gentleman realise that he ought not to allow this matter to drift?

Sir J. Simon: A matter of this importance is under constant observation.

Oral Answers to Questions — ENTERTAINMENTS DUTY.

Mr. R. Acland: asked the Chancellor of the Exchequer what principles are applied in deciding whether a ticket granting admission to premises containing a collection of animals shall be required to bear an entertainment duty stamp or not; is he satisfied that tickets of admission to the Primley Zoological Gardens at Torquay fall within the class that ought to bear such a stamp; and to how many such premises it is possible to gain admission by a ticket which is exempted from duty and which is not so exempted, respectively?

Sir J. Simon: Exhibitions of the kind referred to by the hon. Member are entertainments within the meaning of Section 1 of the Finance (New Duties) Act, 1916, and payments exceeding 6d. for admission to such exhibitions incur liability to Entertainments Duty unless the exhibitions qualify for exemption from duty under one or other of the relevant statutory provisions. I am satisfied that payments exceeding 6d. for admission to the privately owned zoological exhibition referred to do not qualify for exemption from duty under any provision of the law. In regard to the last part of the question, exemption from duty has not been granted in respect of any privately-owned exhibition of this kind.

Mr. Charles Williams: Does the answer refer to the Zoo at Paignton as there is no Zoo at Torquay?

Sir J. Simon: It is at Paignton.

Oral Answers to Questions — INCOME TAX.

Mr. Keeling: asked the Chancellor of the Exchequer what was the yield of Income Tax under Schedule D in the latest year for which the figure is available; and what is the estimated yield in the current year?

Sir J. Simon: I regret that I am unable to furnish this information as the accounts dealing with the collection of

tax do not distinguish the amounts by reference to the various schedules of charge. My hon. Friend, however, will find in Tables 41, 42 and 49 of the 79th Annual Report of the Commissioners of Inland Revenue (Command Paper No. 5297) the latest information available relating to the income assessed under Schedule D.

Mr. Crowder: asked the Chancellor of the Exchequer whether he is aware that Income Tax chargeable on property in Ireland is charged and assessed by a poundage rate upon the annual value of all tenements and rateable hereditaments according to the respective surveys and valuations made or to be made and from time to time in force for the purposes of the rates for the relief of the poor in Ireland; and whether he will consider the desirability of introducing a similar system for Income Tax assessment under Schedule A in this country in order to avoid the present differentiation between assessments for rates and assessments for Income Tax?

Sir J. Simon: The special provisions of the Income Tax Acts applicable to Northern Ireland provide that the Income Tax annual values of properties in that area are to be ascertained according to their poor rate valuations. I am not prepared to introduce legislation extending this system to other parts of the British Isles.

Mr. Crowder: Will the right hon. Gentleman consider issuing instructions to revenue authorities to co-operate with the rating committees so that they may arrive at the same value for certain property and obviate what is happening where there is one value for Schedule A and one value for rating purposes?

Sir J. Simon: That is a matter which has been discussed in the House but cannot be properly dealt with by question and answer. I would remind the hon. Member that in the Rating and Valuation Bill, 1925, there were proposals with a view to the ultimate assimilation of the two systems and providing for the intervention of a revenue officer in the preparation of the assessment, but these proposals were so strongly opposed that they had to be withdrawn in the Committee stage.

Oral Answers to Questions — GOVERNMENT DEPARTMENTS (EX-SERVICE MEN).

Mr. Banfield: asked the Financial Secretary to the Treasury whether, under the new scheme for placing service-expired men on their retirement in Civil Service posts, their service with the Colours will be taken into account towards their civil pension on final retirement?

The Financial Secretary to the Treasury (Lieut.-Colonel Colville): No, Sir. The appointments are in many cases to non-pensionable posts. In the case of pensionable posts, the duration of civil employment will, in accordance with the usual practice, determine the amount of any pension. The proposal that Colour service should count towards civil pension has been repeatedly examined, but successive Governments have not found it possible to adopt it. I would invite the attention of the hon. Member to paragraphs 687 and 688 of the Report of the Royal Commission on the Civil Service (Command Paper No. 3909).

Major-General Sir Alfred Knox: Does the hon. and gallant Member not realise that this concession would be a valuable aid to recruiting? Does he not realise that the attitude of the Treasury all along has prevented recruiting? If you change the Secretary of State for War every week you will never get recruits until the Treasury changes.

Lieut.-Colonel Colville: I do not agree at all with my hon. and gallant Friend that the Treasury is preventing recruiting. If he will refer to the report I have mentioned he will see that there is some difficulty. I have examined it with every sympathy, but there is a good deal of difficulty in adopting it.

Mr. Thurtle: Is the hon. and gallant Member not aware that the Treasury is the root of most of our troubles these days?

Oral Answers to Questions — HOUSING (FINANCE COMPANIES).

Mr. Mainwaring: asked the Attorney-General whether he is aware that finance companies are purchasing landed estates in the depressed areas of the country and are using the legal power thus obtained to compel unemployed men, widows, and other poor persons to purchase the freehold of their dwellings, in

default of which to impose upon them certain heavy costs of inspection and the possible loss of this household property on account of dilapidations; and whether he is prepared to introduce legislation to end the practice?

The Solicitor-General (Sir Terence O'Connor): As I stated on 25th November, 1936, in reply to a question by the hon. Member for Carmarthen (Mr. Hopkin), some cases of the kind referred to have been brought to the notice of my Noble Friend, but I have no evidence that the practice is as general as is suggested in the question. As stated in that answer, the matter is under consideration, and I would be glad to receive evidence of any instances. It is hardly necessary for roe to point out that Parliamentary time is much congested, and that very difficult questions are likely to arise in connection with the matter.

Mr. Mainwaring: Am I to understand that the hon. and learned Gentleman would gladly avail himself of evidence of the widespread character of this evil?

The Solicitor-General: Most certainly; I shall be glad to receive evidence from any quarter.

Mr. Mainwaring: If we advance evidence of the widespread presence of this evil, amounting to no less than a legal form of blackmail, which is rampant in this country—half the constituencies in South Wales are affected—.will the hon. and learned Member in that event be prepared to take immediate action to put an end to this practice?

The Solicitor-General: .As I said in my answer in November last, the matter is under the careful consideration of my Noble and learned Friend, and any instances that are brought to my notice will certainly be collated with a view to consideration of the matter.

Mr. Maxton: Will the hon. and learned Member be also prepared to receive evidence that this particular kind of racketeering is not confined merely to the depressed areas? Will he receive evidence from all parts of the country?

The Solicitor-General: Most certainly.

Mr. Petherick: Is not the reason why these finance companies are able to pur-


chase large landed estates due to the fact that they are being broken up by the crushing effect of Death Duties?

Oral Answers to Questions — CINEMATOGRAPH EQUIPMENT, SCHOOLS.

Captain Sir William Brass: asked the Parliamentary Secretary to the Board of Education, what rate of grant is payable by the Board on the expenditure of local education authorities on the provision of cinematograph equipment for schools?

The Parliamentary Secretary to the Board of Education (Mr. Kenneth Lindsay): The Board are willing to regard the provision of cinematograph equipment in public elementary schools as an educational development to be aided under the Elementary Education Grant Regulations by a 50 per cent. grant. Fifty per cent. grant is also payable under the Higher Education Grant Regulations on the expenditure incurred by local education authorities on the provision of cinematograph equipment in secondary and technical schools.

Sir W. Brass: Do I understand from the reply that the hire of films will also be subsidised?

Mr. Lindsay: I should like to have notice of that question.

Oral Answers to Questions — LOCAL AUTHORITIES (TENDERS FOR CONTRACTS).

Mr. Thorne: asked the Minister of Health how he intends to advise the Bethnal Green Borough Council, the Hertfordshire County Council, the Middlesex County Council, and other local authorities in connection with tenders when all the tenders are exactly the same in amount?

Mr. Bernays: Each case of this kind brought to the notice of my right hon. Friend is considered from the point of view of the reasonableness of the tender prices. In the three cases mentioned, the prices quoted were not regarded as unreasonable either by the local authorities concerned or by my right hon. Friend, who saw no grounds for dissenting from the local authorities' proposals to accept them.

Mr. Thorne: It is not a question of a reasonable price. It is a question of similar tenders for a particular job. Does not that prove the existence of a ring?

Mr. Bernays: I cannot accept the hon. Member's suggestion. The point is whether these tenders were or were not reasonable. They were carefully examined by the experts of the local authorities and by the experts of the Ministry of Health, and they both came to the decision that no objection should be taken to them.

Mr. Herbert Morrison: Are we to take it from the hon. Member's reply that the Government have completely given up all hope of preserving the capitalist competitive system?

Sir Percy Harris: Is not this a ring? Does it not suggest, when exactly the same prices are quoted, that it is a conspiracy against the consumer, and will not the hon. Member bring the matter to the attention of the Chancellor of the Exchequer to remove the protection this industry gets which enables them to form a combine?

Mr. Bernays: I have nothing to add to the answer I have given, but I can assure the hon. Member that the matter is being closely watched.

Mr. A. V. Alexander: Are we to understand that the Parliamentary Secretary has now finally shed all the Liberalism he ever had?

Oral Answers to Questions — SPAIN.

Mr. Attlee: (by Private Notice) asked the Secretary of State for Foreign Affairs whether he can make any further statement regarding the situation arising out of the events at Ibiza and Almeria?

The Secretary of State for Foreign Affairs (Mr. Eden): The German Government have decided to take no further part in the naval patrol of the Spanish coasts or in the discussions of the Non-Intervention Committee, so long as they have not received sure guarantees against the repetition of such occurrences as the bombing of the "Deutschland." A similar decision has been taken by the Italian Government. I understand, however, as the outcome of inquiries I have made, that these Governments regard the international scheme of observation as still


applicable to them in every respect, with the exception of their participation in the naval patrol. The situation was considered yesterday at a meeting of the Chairman's Sub-Committee, which was not attended by the German or Italian representatives. The representatives present indicated that they proposed to report the situation to their respective Governments and requested the Chairman to summon a further meeting as soon as he thought that it would be advisable.
His Majesty's Government have expressed their deep regret at the decision taken by the German and Italian Governments. They will continue to do their utmost to prevent any aggravation of the present situation. They are in constant consultation with other Governments on this subject with a view to considering what steps can most usefully be taken to restore the situation. The House will, I feel sure, appreciate that it is not possible for me to go into greater detail at present.

Mr. Attlee: Has the right hon. Gentleman considered the question of bringing this matter before the League of Nations in order to consider the facts of these events being established, and also to consider what looks like a possible act of aggression on the part of these Powers?

Mr. Eden: Yes, Sir. Naturally the Government have considered all these aspects of the question, and I note that the Spanish Government themselves, in a statement which they made to the League yesterday, did not ask for an early meeting of the Council. While the Government are ready to co-operate in any work to which both parties would agree, I would be reluctant to pledge myself to any individual action in view of the present position taken by both parties.

Mr. Attlee: May I ask whether His Majesty's Government have expressed their sympathy to the Spanish people in the loss of lives of women and children?

Mr. Eden: I think the House appreciated from what I said yesterday that we regretted what had happened to the "Deutschland" and we regretted also w hat had happened to Almeria.

Mr. Bellenger: Is the right hon. Gentleman in a position to say whether this bombardment of Almeria is an act of war, and in view of its possible wide

repercussions, particularly as far as this country is concerned, will he not make on an early day an explicit statement of the Government's attitude?

Mr. Garro Jones: Have any steps been taken to fill the gap in the coastline which has been left unobserved by the withdrawal of Germany and Italy?

Mr. Eden: Obviously that is one of the questions that has to he examined. It is one of the many problems raised by this very unhappy event.

Mr. Alexander: Do we understand that for the time being those parts of the coast are left unpatrolled?

Mr. Eden: Yes, Sir.

BUSINESS OF THE HOUSE.

Mr. Attlee: May I ask the Prime Minister what will be the business for Friday, and also what business it is proposed to take to-day in the event of the Motion for the Suspension of the Eleven o'Clock Rule being carried?

The Prime Minister: Friday will be a Supply day (9th allotted day, 1st part), but I am not yet in a position to announce which Vote will be taken. To-day we hope to conclude the Second Reading of the Finance Bill by about half-past seven. We are moving the suspension of the Eleven o'Clock Rule in order to cover the Committee stage of the Money Resolution relating to the Finance Bill, and the Third Reading of the Civil List Bill. If there is time before Eleven o'Clock, we would like to obtain the Committee stage of the Chairmen of Traffic Commissioners (Tenure of Office) Bill.

Mr. Maxton: Are we to understand that the Prime Minister is not yet in a position to announce the business for Friday?

The Prime Minister: Friday will be a Supply day, but the particular Vote to be considered will be announced later.

Mr. Attlee: With regard to to-day's business, may we take it that there will be somebody to speak in support of the Government's proposals?

Motion made, and Question put,
That the Proceedings on Government Business be exempted, at this day's Sitting, from the provisions of the Standing Order (Sittings of the House)."— [The Prime Minister.]

The House divided: Ayes, 274; Noes, 114.

Division No. 198.]
AYES.
[3.49 p.m.


Acland, Rt. Hon. Sir F. Dyke
Errington, E.
Mander, G. le M.


Acland, R. T. D. (Barnstaple)
Erskine-Hill, A. G.
Manningham-Bullur, Sir M


Acland-Troyte, Lt.-Col. G. J.
Evans, Capt. A. (Cardiff, S.)
Margesson, Capt. Rt. Hon. H. D. R.


Adams, S. V. T. (Leeds, W.)
Evans, D. O. (Cardigan)
Markham, S. F.


Agnew, Lieut.-Comdr. P. G.
Fildes, Sir H.
Mason, Lt.-Col. Hon. G. K. M.


Albery, Sir Irving
Findlay, Sir E.
Maxwell, Hon. S. A.


Allen, Col. J. Sandeman (B'knhead)
Fremantle, Sir F. E.
Mayhew, Lt.-Col. J.


Anderson, Sir A. Garrett (C. of Ldn.)
Furness, S. N.
Mellor, Sir J. S. P. (Tamworth)


Anstruther-Gray, W. J.
Fyfe, D. P. M.
Mills, Sir F. (Leyton, E.)


Apsley, Lord
Ganzoni, Sir J.
Mitchell, Sir W. Lane (Streatham)


Assheton, R.
George, Major G. Lloyd (Pembroke)
Moore, Lieut.-Col. Sir T. C. R.


Astor, Hon. W. W. (Fulham, E.)
Gledhill, G.
Morgan, R. H.


Baldwin-Webb, Col. J.
Gluckstein, L. H.
Morris, O. T. (Cardiff, E.)


Balfour, Capt. H. H. (Isle of Thanet)
Goodman, Col. A. W.
Morrison, G. A. (Scottish Univ's.)


Beamish, Rear-Admiral T. P. H.
Grant-Ferris, R.
Muirhead, Lt.-Col. A. J.


Beaumont, M. W. (Aylesbury)
Granville, E. L.
Munro, P.


Beaumont, Hon. R. E. B. (Portsm'h)
Grattan-Doyle, Sir N.
Neven-Spence, Major B. H. H.


Beit, Sir A. L.
Gretton, Col. Rt. Hon. J.
Nicolson, Hon. H. G.


Bennett, Sir E. N.
Gridley, Sir A. B.
O'Connor, Sir Terence J.


Bernays, R. H.
Griffith, F. Kingsley (M'ddl'sbre, W.)
O'Neill, Rt. Hon. Sir Hugh


Birchall, Sir J. D.
Grigg, Sir E. W. M.
Ormsby-Gore, Rt. Hon. W. G. A.


Bird, Sir R. B.
Grimston, R. V.
Orr-Ewing, I. L.


Blair, Sir R.
Guest, Hon. I. (Brecon and Radnor)
Owen, Major G.


Boulton, W. W.
Gunston, Capt. D. W.
Palmer, G. E. H.


Bracken, B.
Guy, J. C. M.
Patrick, C. M.


Brass, Sir W.
Hacking, Rt. Hon. D. H.
Peake, O.


Briscoe, Capt. R. G.
Hamilton, Sir G. C.
Peat, C. U.


Brocklebank, Sir Edmund
Hanbury, Sir C.
Perkins, W. R. D.


Brown, Brig.-Gen. H. C. (Newbury)
Hannah, I. C.
Peters, Dr. S. J.


Bull, B. B.
Harris, Sir P. A.
Petherick, M.


Bullock, Capt. M.
Harvey, Sir G.
Pickthorn, K. W. M.


Burgin, Rt. Hon. Dr. E. L.
Harvey, T. E. (Eng. Univ's.)
Pilkington, R.


Burton, Col. H. W.
Haslam, H. C. (Horncastle)
Plugge, Capt. L. F.


Butler, R. A.
Heilgers, Captain F. F. A.
Pownall, Lt.-Col. Sir Assheton


Campbell, Sir E. T.
Heneage, Lieut.-Colonel A. P.
Radford, E. A.


Cartland, J. R. H.
Hepburn, P. G. T. Buchan-
Ramsbotham, H.


Cary, R. A.
Hepworth, J.
Ramsden, Sir E.


Castlereagh, Viscount
Herbert, A. P. (Oxford U.)
Rankin, Sir R.


Cayzer, Sir C. W. (City of Chester)
Herbert, Capt. Sir S. (Abbey)
Rathbone, J. R. (Bodmin)


Cayzer, Sir H. R. (Portsmouth, S.)
Higgs, W. F.
Rawson, Sir Cooper


Cazalet, Thelma (Islington, E.)
Hills, Major Rt. Hon. J. W. (Ripon)
Rayner, Major R. H.


Cazalet, Capt. V. A. (Chippenham)
Holmes, J. S.
Reed, A. C. (Exeter)


Chamberlain, Rt. Hn. N. (Edgb't'n)
Hope, Captain Hon. A. O. J.
Reid, Captain A. Cunningham


Channon, H.
Hore-Belisha, Rt. Hon. L.
Reid, W. Allan (Derby)


Chapman, Sir S. (Edinburgh, S.)
Horsbrugh, Florence
Remer, J. R.


Chorlton, A. E. L.
Howitt, Dr. A. B.
Robinson, J. R. (Blackpool)


Christie, J. A.
Hudson, Capt. A. U. M. (Hack., N.)
Ropner, Colonel L.


Churchill, Rt. Hon. Winston S.
Hulbert, N. J.
Rowlands, G.


Clarke, Lt.-Col. R. S. (E. Grinstead)
Hume, Sir G. H.
Russell, Sir Alexander


Cobb, Captain E. C. (Preston)
Hunter, T.
Russell, R. J, (Eddisbury)


Colfox, Major W. P.
Hurd, Sir P. A.
Russell, S. H. M. (Darwen)


Colville, Lt.-Col. Rt. Hon, D. J.
James, Wing-Commander A. W. H.
Salmon, Sir I.


Cooke, J. D. (Hammersmith, S.)
Jones, Sir H. Haydn (Merioneth)
Sandeman, Sir N. S.


Cooper, Rt. Hn. T. M. (E'nburgh, W.)
Jones, L. (Swansea W.)
Sandys, E. D.


Crooke, J. S.
Keeling, E. H.
Sassoon, Rt. Hon. Sir P.


Crookshank, Capt. H. F. C.
Kerr, Colonel C. I. (Montrose)
Savory, Sir Servington


Cross, R. H.
Kerr, H. W. (Oldham)
Seely, Sir H. M.


Crossley, A. C.
Keyes, Admiral of the Fleet Sir R.
Selley, H. R.


Crowder, J. F. E.
Knox, Major-General Sir A. W. F.
Shaw, Captain W. T. (Forfar)


Cruddas, Col. B.
Lamb, Sir J. Q.
Shepperson, Sir E. W.


Culverwell, C. T.
Lambert, Rt. Hon. G.
Shute, Colonel Sir J. J.


Davies, C. (Montgomery)
Leckie, J. A.
Simmonds, O. E.


Davies, Major Sir G. F. (Yeovil)
Leigh, Sir J.
Simon, Rt. Hon. Sir J. A.


Davison, Sir W. H.
Leighton, Major B. E. P.
Sinclair, Rt. Hon. Sir A. (C'thn's)


De Chair, S. S.
Levy, T.
Smith, Bracewell (Dulwich)


De la B£re, R.
Liddall, W. S.
Smith, Sir R. W. (Aberdeen)


Denman, Hon. R. D.
Lindsay, K. M.
Somerset. T.


Despencer-Robortson, Major J. A. F.
Llewellin, Lieut.-Col. J. J.
Somerville, A. A. (Windsor)


Doland, G. F.
Lloyd, G. W.
Southby, Commander Sir A. R. J.


Donner, P. W.
Locker-Lampson, Comdr. O, S.
Spears, Brigadier-General E. L.


Dorman-Smith, Major Sir R. H.
Loftus, P. C.
Spens. W. P.


Dugdale, Captain T. L.
Lovat-Fraser, J. A.
Stanley, Rt. Hon. Oliver (W'm'l'd)


Duggan, H. J.
Mabane, W. (Huddersfield)
Stewart, J. Henderson (Fife, E.)


Duncan, J. A. L.
MacAndrew, Colonel Sir C. G.
Stewart, William J. (Belfast, S.)


Dunglass, Lord
M'Connell, Sir J.
Storey, S.


Eden, Rt. Hon. A.
McCorquodale, M. S.
Stourton, Major Hon. J. J


Elliot, Rt. Hon. W. E.
MacDonald, Rt. Hon. M. (Ross)
Strauss, E. A. (Southwark N.)


Ellis, Sir G.
McKie, J. H.
Strauss, H. G. (Norwich)


Elliston, Capt. G. S.
Maclay, Hon. J. P.
Strickland, Captain W. F.


Elmley, Viscount
Macnamara, Capt. J. R. J.
Stuart, Lord C. Crichton- (N'thw'h)


Emery, J. F.
Magnay, T.
Sueter, Rear-Admiral Sir M. F.


Emmott, C. E. G. C.
Maitland, A.
Sutcliffe, H.


Entwistle, Sir C. F.
Makins, Brig.-Gen. E.
Tasker, Sir R. I.







Tate, Mavis C.
Wallace, Capt. Rt. Hon. Euan
Withers, Sir J. J.


Taylor, C. S. (Eastbourne)
Wardlaw-Milne, Sir J. S.
Womersley, Sir W. J.


Taylor, Vice-Adm. E. A. (Padd., S.)
Warrender, Sir V.
Wragg, H.


Thomas, J. P. L.
Waterhouse, Captain C.
Wright, Squadron-Leader J. A. C.


Thomson, Sir J. D. W.
Watt, G. S. H.
Young, A. S. L. (Partiek)


Titchfield, Marquess of
Wedderburn, H. J. S.



Touche, G. C.
Wells, S. R.
TELLERS FOR THE AYES.—


Tree, A. R. L. F.
Wickham, Lt.-Col. E. T. R.
Mr. James Stuart and Lieut.-


Tryon, Major Rt. Hon. G. C.
Williams, C. (Torquay)
Colonel Sir A. Lambert Ward.


Turton, R. H.
Willoughby de Eresby, Lord





NOES.


Adams, D. (Gonsett)
Hall, J. H. (Whitechapel)
Quibell, D. J. K.


Adams, D. M. (Poplar, S.)
Henderson, A. (Kingswinford)
Richards, R. (Wrexham)


Adamson, W. M.
Henderson, T. (Tradeston)
Rowson, G.


Alexander, Rt. Hon. A. V. (H'lsbr.)
Hopkin, D.
Sanders, W. S.


Ammon, C. G.
Jenkins, A. (Pontypool)
Sexton. T. M.


Attlee, Rt. Hon. C. R.
Jenkins, Sir W. (Neath)
Shinwell, E.


Banfield, J. W.
Jones, A. C. (Shipley)
Short, A.


Barnes, A. J.
Jones, J. J. (Silvertown)
Silverman, S. S.


Bellenger, F. J.
Jones, Morgan (Caerphilly)
Simpson, F. B.


Benn, Rt. Hon. W. W.
Kelly, W. T.
Smith, Ben (Rotherhithe)


Bromfield, W.
Kennedy, Rt. Hon. T.
Smith, E. (Stoke)


Brown, G. (Mansfield)
Kirby, B. V.
Smith, Rt. Hon. H. B. Lees- (K'ly)


Brown, Rt. Hon. J. (S. Ayrshire)
Kirkwood, D.
Smith, T. (Normanton)


Burke, W. A.
Lawson, J. J.
Sorensen, R. W.


Cape, T.
Leach, W.
Stephen, C.


Charleton, H. C.
Lee, F.
Stewart, W. J. (H'ght'n-le-Sp'ng)


Chater, D.
Leonard, W.
Strauss, G. R. (Lambeth, N.)


Cluse, W. S.
Logan, D. G.
Taylor, R. J. (Morpeth)


Clynes, Rt. Hon. J. R.
Lunn, W.
Thorne, W.


Cooks, F. S.
Macdonald, G. (Ince)
Thurtle, E.


Cove, W. G.
McEntee, V. La T.
Tinker, J. J,


Davidson, J. J. (Maryhill)
McGhee, H. G.
Viant, S. P.


Davies, R. J. (Westhoughton)
MacLaren, A
Walker, J.


Davies, 5. O. (Merthyr)
Maclean, N.
Watkins, F. C.


Day. H.
MacNeill, Weir, L.
Watson, W. McL.


Dobbie, W.
Mainwaring, W. H.
Wedgwood, Rt. Hon. J. C.


Dunn, E. (Rother Valley)
Marshall, F.
Welsh, J. C.


Edwards, Sir C. (Bedwellty)
Maxton, J.
Westwood, J.


Gallacher, W.
Messer, F.
White, H. Graham


Gardner, B. W.
Montague, F.
Williams, D. (Swansea, E.)


Garro Jones, G. M.
Moreing, A. C.
Williams, E. J. (Ogmore)


Gibbins, J.
Morrison, Rt. Hon. H. (Hackney, S.)
Williams, T. (Don Valley)


Gibson, R. (Greenock)
Morrison, R. C. (Tottenham, N.)
Wilson, C. H. (Attercliffe)


Green, W. H. (Deptford)
Muff, G.
Windsor, W. (Hull, C.)


Greenwood, Rt. Hon. A.
Noel-Baker, P. J.
Woods, G. S. (Finsbury)


Grenfell, D. R.
Oliver, G. H.
Young, Sir R. (Newton)


Griffiths, G. A. (Hemsworth)
Paling, W.



Griffiths, J. (Llanelly)
Potts, J.
TELLERS FOR THE NOES.—


Hall, G. H. (Aberdare)
Price, M. P.
Mr. Whiteley and Mr. Mathers.

CHILDREN AND YOUNG PERSONS (SCOTLAND) BILL [Lords].

Read the First time; to be read a Second time upon Thursday, and to be printed. [Bill 158.]

HYDROGEN CYANIDE (FUMIGATION) BILL [Lords].

Read the First time; to be read a Second time upon Thursday, and to be printed. [Bill 159.]

MESSAGE FROM THE LORDS.

That they have agreed to,—

Glasgow Corporation Order Confirmation Bill,

London Midland Scottish Railway Order Confirmation Bill,

Johnstone Burgh Order Confirmation Bill, without Amendment.

Grimsby Corporation (Grimsby and District: Water, etc.) Bill, with Amendments.

Amendments to—

Burgess Hill Water Bill [Lords],

Mansfield District Traction Bill [Lords], without Amendment.

Orders of the Day — FINANCE BILL.

Order read for resuming Adjourned Debate on Amendment to Question [31.st May], "That the Bill be now read a Second time";

Which Amendment was, to leave out from the word "That," to the end of the Question, and to add instead thereof:
this House cannot assent to the Second Reading of a Bill which, in time of peace and rising prices, embodies an unbalanced Budget, thereby promoting further increases in prices and depressing the already low standard of life of pensioners, unemployed, wage-earners and other persons of small means, and which fails to deal adequately with profiteering in armaments or to raise an equitable share of their cost from those most able to bear the burden."—[Mr. Dalton.]

Question again proposed, "That the words proposed to be left out stand part of the Question."

4.1 p.m.

Mr. Lees-Smith: The greater part of the discussion yesterday, although not all of it, was, of course, concerned with the National Defence Contribution, and in a short time I shall come to that subject myself. But I and my hon. Friends have put down an Amendment which deals with other subjects as well as the National Defence Contribution, and I think it may well prove to be that the wider issues to which our Amendment calls attention may before many years have passed be realised to have been more important even than the National Defence Contribution, which at present looks rather like being a nine days' wonder. I shall address myself to some of those wider issues first. The main purpose of our Amendment is to ask the House to try to take some survey, in the light of this Budget, of what our position is likely to be a few years hence, when this problem may very well be dealt with by another Government which is not at all responsible for the causes which have brought it into being.
At the present moment the chief fact which underlies all our finance is that we are in a fairly advanced stage of a world trade revival. I think it is now generally agreed that that revival began at the beginning of 1933, and I think it is true to say that no trade boom yet

has ever lasted for more than five years. That takes us to the beginning of 1938. The most careful estimate of the possibilities have been made by the Unemployment Insurance Statutory Committee, who have to be very careful because they have to base their own proposals for the Unemployment Fund on their estimates. They say that they do not expect an appreciable accession of employment beyond the present level during the year 1937, and for some time thereafter; but they say that we must then be prepared for a relatively severe recession, and they put the unemployment which we must expect sometime after 1937 at about 2,000,000. But the Unemployment Insurance Statutory Committee takes into account only the operation of what it calls the general trade cycle. It does not take into account the special policy of the Government. What is the policy of the Government in its effects upon unemployment?
It has always been admitted, I think, that any great programmes of public works ought to be held back at the peak of a trade boom and kept in reserve until the slump breaks. This rearmament programme is in fact a great programme of public works, thrown on to the market at the very moment when it is not required. If and when, as the Government anticipate, two or three years hence that rearmament programme is slowed down, that in itself is just one of those effects which precipitate by themselves a trade slump. So that we shall have two causes endangering us, with a trade slump in operation more or less at the same time—the general turn in the world condition and the slowing up of the rearmament programme. But there are other causes of danger also. There has been a great deal of Debate to and fro between the two sides of the House as to the effect of raising a loan of £80,000,000. It cannot be doubted that at any rate one result of raising a loan and embarking on great public expenditure is an artificial increase in the demand for commodities in order to raise prices.
One of the main causes of slumps in the past has been the sudden fall in prices. Again what have we to face? When rearmament comes to an end the borrowing comes to an end at the same time, and the fall in prices due to that cause is likely to be set in operation. In fact the whole policy of the Government is


that the cessation of borrowing, one cause of slump, will synchronise with the cessation of rearmament, another cause of slump, and we are faced with the cessation also of the world trade revival. Never at any time that I can remember have we been faced with the prospect of so many perils of a slump a few years after a Budget is introduced. If, as is extremely probable, these three causes begin to operate within broadly the same period of years, we have to face the prospect of one of the most catastrophic slumps with which this House has ever had to deal.
I must just refer to a feature of our policy which was not mentioned yesterday. I was rather surprised. I would have thought that when it is almost agreed by the House as a whole that we have to face the danger of a slump in two or three years, the Government would have made some preparations to deal with the possibility in advance, and would not have left unemployment to be dealt with until it is too late. We have always held that during the period of a trade boom like this you ought to hold back as much public work as you can, and that you should take advantage of your opportunity to foresee in advance programmes of public works all over the country and draw them up in order of priority. That has been a policy of ours for some time, and I mention it for a special reason. The last time I took part in a Debate on a financial question I think I followed the present Prime Minister, who was very pleased on that day to defend himself with a recital of Mr. Maynard Keynes. I well remember that I warned him that he would find Mr. Maynard Keynes a very unreliable ally. I think that the right hon. Gentleman will not quote Mr. Maynard Keynes in regard to the National Defence Contribution, because the first really devastating attack on that proposal was in a letter addressed by Mr. Keynes to the "Times" almost so soon as the proposal was introduced.

Major Hills: Mr. Maynard Keynes said plainly that the borrowing for the Defence Contribution need not be inflationary. He expressly said so in a speech to the shareholders of an insurance company of which he is chairman. I have the reference here.

Mr. Lees-Smith: I remember the speech, and that is the point I am making. It

was that speech and an article in the "Times" conveying the same opinions that the Prime Minister quoted. I warned him that Mr. Keynes was an unreliable ally. It is a letter published in the last three weeks to which I am referring now. What he says seems to me to be common sense. Let me quote:
Now is the time to appoint a board of public investment, to prepare sound schemes against the time that they are needed. We ought to set up immediately an authority whose business is not to launch anything at present, but to make sure that detailed plans are prepared. The railway companies, the port and river authorities, the water, gas and electricity undertakings, the building contractors, the local authorities, above all, perhaps, the London County Council and the other great corporations, should he asked to investigate what projects could be usefully undertaken if capital were available at certain rates of interest—3½ per cent., 3 per cent., 2½ per cent., 2 per cent. The question of the general advisability of the schemes and their order of preference should be examined next.
That is the proposal. I notice Mr. Keynes ends by saying:
Is it conceivable that the Government should do anything in time?
That, indeed, is one of the difficulties of debating with the present Government. When one makes a suggestion it is generally received with approval, a sort of watery affirmative, but when it comes to positive action all ends in smoke. I mention that for this reason. Here we have the obvious danger of a very great trade slump in front of us. It is also obvious that the Government are not taking any particular steps to prepare for the time which is about to come. In view of that fact I want to examine the Budget figures and the prospects which they present to us two or three years hence. The revenue of this Budget is.£863,000,000. The expenditure is £80,000,000 beyond that. The Prime Minister when Chancellor of the Exchequer said that he did not wish to raise the revenue beyond that sum because it would challenge the revival of trade. But the revenue is now £863,000,000, and the anticipation is that in a few years the expenditure will decline and we shall be able to meet that expenditure without borrowing. But, as a matter of fact, is it so evident that there will be a sufficient decline of expenditure to meet the problem in a few years? After all, there will be a great change in the position financially at the end of three


or four years. The whole level of armaments will have been raised, and, therefore, the cost of the annual maintenance of armaments will be far higher.
I presume that the Chancellor of the Exchequer proposes some day to establish a Sinking Fund. It is certainly very far from any normal financial arrangement for the year, but even if he establishes the Sinking Fund that the Labour Administration maintained, in spite of all the criticism against them, that is another £30,000,000. Then we must take into account the possibility of a small rise in the rate of interest, and if it rises even to three per cent. for short-term loans, which is not at all an exaggerated anticipation, there is another.£20,000,000. There will be the addition to the money that is being borrowed, on which interest will have to be paid, and there is certainly another £12,000,000 for that. If we take all these new sources of expenditure into account, we shall find that the revenue at the present time, apart from borrowing, is not likely to meet that expenditure.
There is a very careful and surely realistic examination of the whole situation in the "Economist" Budget supplement. That is not political, but it is a collection of statistics, and they very carefully come to the conclusion there that our normal expenditure will be about £920,000,000. The Chancellor of the Exchequer this year raises £863,000,000, and he may raise it next year, but whenever there is a turn in trade, his expenditure will go up and his revenue will go down, and if he is unable to balance his Budget when we are on the peak of a boom, still less will he be able to balance it when we are in the depth of a slump. I am bound to say that if I were a supporter of the present Government, I should view the prospects of the future with the most extreme apprehension. Here are the Government now borrowing for wasting assets like aeroplanes, which wear out in four or five years, borrowing in a period of booming world trade, breaking every canon of finance with which the present Prime Minister so fiercely assailed the Labour Administration in 1931. They have all broken in his hands, with a larger deficit than there was then, and with the prospect that in a few years hence the deficit which is present in a time of boom will still be present in a time of slump,

and you will have the prospect of another economy campaign and another attack on the social services and the standard of living.
My hon. Friend the Member for Bishop Auckland (Mr. Dalton), in speaking yesterday, pointed out a feature of the situation which I would like to develop a little further. We believe that the present situation is the direct responsibility of the present Government. It is not the fact that they are living in unfortunate times. The present rate of expenditure is directly connected with their conduct during the Disarmament Conference in 1932. The Chancellor of the Exchequer to-day is reaping the consequences of his, I will not say action, but complete inaction until it was too late, when he was Foreign Secretary. We hold that, and I will occupy a minute or two in telling the House why we believe that. I was in a position to follow this at leisure, and I am bound to say that I was very disturbed day by day at what was happening with this country at the Disarmament Conference. As a matter of fact, there has only been one successful Disarmament Conference since the end of the War, and that was the Washington Conference, when Mr. Secretary Hughes on the very first afternoon took the lead and came forward with what, at that time, was the shattering proposal for a holiday in all capital ships for 10 years.
When the Disarmament Conference in Europe opened at the beginning of 1932, we had just as good a chance as Mr. Secretary Hughes. France was under a moderate Government, Germany was under Dr. Bruening, and they were wanting to come together, but they looked to this country, which is rather outside the ring and is a kind of arbiter, to take the first step. If, at that time, we had had someone representing us who had done what Mr. Hughes did, at any rate we can say that there is a reasonable prospect that better results would have been obtained. I watched it at the time —I am speaking of what I remember very well—from day to day, and I noticed that our Government were playing a waiting game. I read about everyone else putting forward proposals. There were the Hoover proposals and the Hughes proposals, but as a matter of fact no serious British proposals came until March, 1933. I do not criticise the


proposals when they did come, but it was 13 months after the Conference opened, with the result that by that time Chancellor Hitler had come into power, the whole opportunity had been frittered away, and we had the humiliating spectacle of finding ourselves offering to the threats of Hitler twice as much as we had refused to the reasonable moderation of Dr. Bruening.
When we are attacked for 1931, it should be remembered that, after all, every Government has its own special problem. We had the problem of coming into office at the very beginning of an economic blizzard which swept the world. That was our problem. The Government's problem was the disarmament situation in Europe, and I certainly say that it was easier for the Government to have influenced the disarmament situation in Europe than it was for this or any other country to have influenced an economic blizzard sweeping throughout the world. I recollect that the late Lord President of the Council, early in the last Parliament, used to make speeches asking us to judge the National Government by their results. We do judge them by their results, and the results are that now, after six years of National Government, you have got larger armaments than ever since the War came to an end, and you have the Chancellor of the Exchequer in a time of trade boom saying he must give us a deficit upon the Budget.
Now I come to the National Defence Contribution. The House will realise from what I have been saying that one of the great needs of the situation is left entirely unmet by the N.D.C. In my view what we really need is to devise some method which will assist us in the days of trial, the days of need, when the inevitable slump is upon us, but a tax which is devised and developed to assist us when times are easy and which dries up just when we want it, seems to me to fail to meet the essential requirements of the national situation. I would like to call attention to another feature of this whole situation which has not been mentioned in the Debate and which indeed has scarcely been mentioned outside this House, and yet it seems to me to be a feature from which all Governments will be very wise to learn a lesson for the

future. I think it is true to say that beyond the Chancellor of the Exchequer, and perhaps the Prime Minister, there was not a single Member of the Government who knew anything about the proposal for the National Defence Contribution at six o'clock the day before the Budget was introduced, and certainly the Chancellor of the Exchequer was very careful yesterday to make it clear to us that, whatever may have happened afterwards, he himself was in no way concerned with the origin of this proposal. I believe that is true and that no Member of the Government knew a word about this proposal, except perhaps the Prime Minister and the Chancellor of the Exchequer, at six o'clock the day before the Budget was introduced.
It is getting to be a very serious feature of our system of government. After all, finance is a very important part of government, and here we have gradually developed a situation in which the control of finance is, for all practical purposes, in the hands of one man, the Chancellor of the Exchequer, with perhaps the knowledge of the Prime Minister. The whole system has gone too far, and I most earnestly hope that the unfortunate incident of last year is not going to lead to the perpetuation of this system. It is very new. I see the right hon. Member for Epping (Mr. Churchill) sitting there. I believe it is true to say that the cause of the resignation of Lord Randolph Churchill was the very fact that a Budget was introduced in the Cabinet, and as a result of the decision of the Cabinet he resigned.

Mr. Churchill: No. The resignation arose out of the discussion of the Estimates during November.

Mr. Lees-Smith: At any rate, this is a comparatively new development. The Cabinet used to have responsibility for the Budget until fairly recent years, and I am glad to say that, so far as my hon. Friends and I are concerned, we ourselves have actually brought this matter before one of our annual party conferences years ago and have declared that we are not going to allow this monopoly of power to continue. I am hound to say that our views on that subject are greatly strengthened by this fiasco which, as a consequence, has ensued. Let the House consider it. I am always very nervous when I learn that three or four very


clever men are sitting in a room with all the fresh air from outside excluded. I know that when you get discussions of that sort you get as a result a great deal of knowledge and a great deal of expert experience, but you probably find—I have found over and over again—that when those three or four clever men bring the matter to a larger assembly, a breath of common sense blows through the whole thing and sweeps it away. Anyone who has been in public life has had that experience probably more than once. You do not get the right perspective if you stay in a sort of little hothouse concentrating on one subject to the exclusion of everything else. I am quite sure that a proposal of this sort would not have lived through any Cabinet discussion at all.
I come to the immediate situation. It is clear that the Debate of yesterday destroyed this proposal as a practical method. It was, in fact, destroyed during the speech of the Chancellor of the Exchequer by the simple question of my hon. Friend the Member for North Tottenham (Mr. R. C. Morrison) who asked what the yield would be after all the concessions. The whole thing has taken on a new aspect since then. The answer was £15,000,000. The analysis of my hon. Friend the Member for Bishop Auckland and others showed that after Income Tax had been taken the amount would be reduced to a little over £11,000,o00. From that had to be deducted the loss on Death Duties, Stamp Duties, the cost of collection and the cost of litigation, until finally a sum was left which was less than could be obtained by 2d. on the Income Tax. How could a proposal like that have got through any Cabinet discussion? As far as this year is concerned with the loss in security values, I am not sure it will not lead to a minus quantity. The proposal has really become ridiculous, and I am sure that the Prime Minister will sink deeper into the quicksands the longer he stays on this ground.
I would ask him to take this fact into account. I suppose there never has been an occasion, except certain ceremonial occasions, on which the House has been so unanimous as it showed itself to be yesterday. It is clear what the House wants. It wants a tax on profits, but it wants a tax of less complexity and more yield. Many suggestions were put to the

Prime Minister as to how that result could be secured. I hope that he will not accept the rather naive suggestion which came from behind him that he should go to the industrial leaders and ask them how they themselves would like to provide this money, and that they should take control of the taxation into their hands out of the hands of this House. A new situation has now arisen, and this is what the Prime Minister should take into account, apart from the merits of the whole subject and from the question whether he thinks it is right. I have always understood that when this House expresses a clear opinion it is the duty of the Government to accommodate themselves to that view. Otherwise, what is the purpose of debates in this House? The late Chancellor has altered his position since he introduced the tax. He is now the Prime Minister and the Leader of the House, and I say that, as the Leader of the House, he ought to conform himself according to the traditions of the House. He ought to conform himself to an opinion which has been so generally expressed.

4.35 P.m.

Mr. Churchill: The ranks of ex-Chancellors of the Exchequer have been severely thinned in the last few months from death and other causes, and I find myself the sole survivor on this side of the House. Therefore, it seems to me that I ought not to allow the Second Reading of the Finance Bill to pass without contributing an expression of opinion to the Debate. I certainly do not do so in any hostile spirit to the new Government and to the new Prime Minister. On the contrary, I take a friendly interest in this new Government. I do not quite know why I do. I cannot go so far as to call it a paternal interest, because, speaking candidly, it is not quite the sort of Government I should have bred myself. If it is not paternal, at any rate I think I may call it an avuncular interest.
I will this afternoon begin by expatiating at large upon the canons of financial orthodoxy. All taxes are evil, but the revenue must be found. "A tax," said Adam Smith, "must be clear, definite and equal." There is a well-known Treasury maxim that "an old tax is no tax." The most healthy tax is one whose sole purpose is revenue. Taxation to give effect to some political purpose, or even to inculcate some moral


principle, is usually found to fall short of the highest standard of financial economy. All the best authorities prescribe as the true test of any tax that it should yield the largest sum of money with the least possible disturbance of the life and business of the nation. Another well-known test by which any tax may be judged is the proportion of the cost of collection to the revenue yielded. These are, of course, only the well-known and accepted truisms of the British Exchequer, and we are all agreed upon them.
Now I will venture on the somewhat more disputable ground of profits and profiteering, and the position of individual enterprise. I know that it is the Socialist idea that making profits is a vice, and that making large profits is something of which a man ought to be ashamed. I hold the other view. I consider that the real vice is making losses. I believe that to lead a large number of wage-earners and shareholders up a blind alley into bankruptcy and disorganisation is almost a crime. In happy Communist Russia failure at the head of a manufacturing or trading enterprise is very often considered sabotage punishable by death, or one of the lesser punishments comprised in their somewhat elaborate penal code. The making of profits apart from the question of who gets them, is a virtue in any land, and no one should regard it as a virtue more than a Chancellor of the Exquer with his Income Tax, his Supertax, his Surtax and his Death Duties, which can take, without the Death Duties, 14s. in the £, and, with the Death Duties, according to an answer I remember to have been given by the late Lord Snowden, the whole lot if you insure against Death Duties upon the present scale. So much for the question of profits.
Let me pass to profiteering. The charge of profiteering is justly odious, but what is the essence of profiteering? It is the exploitation of monopoly or the exploitation of famine, disaster or war. I remember that in the pre-war days we used to say that Socialism attacks capital and Liberalism attacks monopoly. It is the exploitation of monopoly or of some public misfortune which constitutes the essential venom of profiteering. That was the

justification of the Excess Profits Duty of which I, as a subordinate Minister, was a strong supporter, and of the aftermath of which I saw and learned a. good deal during the five years I was at the Treasury. The Excess Profits Duty, for all its many obvious anomalies and wasteful defects, was an act of moral and social justice. Millions of men had volunteered to fight, and millions of others were compelled to follow and had to sacrifice their earning capacity at home to fight and die for four terrible years. Some of those who stayed at home made great fortunes in the absence of their natural competitors and under conditions which were totally different from normal life. It was essential that an effort should be made to reclaim for the purposes of reconstruction a portion at least of those excess wartime profits. In a single year a vast sum was recovered—300,000,000 or £400,000,000 at one stroke, if my recollection serves me. Moreover, the profits in this case had actually been made and they could be measured with considerable accuracy by comparing them with normal pre-war years before our affairs were so violently interfered with by the great struggle.
Personally, I do not mind saying that I would have gone as far after the War as a capital levy—[An HON. MEMBER: "Why did you not?"]—I have always suffered from a lack of power to give full effect to my wishes. I know that Mr. Bonar Law was very much inclined that way. It seemed to me, and I think to others, that it would have been quite fair to say that no one should come out of the War richer than he went in. I think that that ought to be considered in case we have another unfortunate experience of that kind. All this dealt with the tremendous cataclysm of the Great War, Armageddon, an event without compare in human experience. That is not the situation to-day. To-day, in the conditions of peace and free competition, the making of large profits cannot be judged apart from the history of any particular firm or person, and I would say that those profits cannot be judged apart from the risk. There are some businesses which are seen to yield large profits, but how many people have tried and failed at one of those businesses before the successful ones made their profits? Again, there are some businesses which are profitable in one year out of five, others maintain a steady flow, but,


broadly speaking, in a free market risk is the shadow of profit and keeps pace with it every hour of the day.
I submit that the Treasury would make a profound mistake if they mix themselves up in these imponderable transactions. Similarly, I would say that it is much better for the Treasury to come along afterwards and say, "Hullo, you have made this money under laws which Parliament prescribed. Quite right. Many congratulations. Please hand over to us 5s. in the £ and anything up to 9s. for Super-tax, according to scale." It will be a great mistake for the Treasury to get mixed up in the processes by which this wealth is acquired, and to get into the position where it will have to sit as a kind of moral judge and say, "This is virtuous, that—h'm, that is not so virtuous, and this is plainly peccant." That is a sphere into which they would really be well advised not to enter. I have often seen it tried and sometimes I have lent myself to its mood, but it nearly always meets with failure and costs more than it is worth. If the State is to meddle with the wealth-getting process, apart, that is to say, from prescribing just laws and taking the lion's share of the profits, there are no grounds of justice for penalising the citizens who engage in risky enterprises or for regarding them as less reputable than those who seek the sweet simplicities of 2 and 3 per cent. On the contrary, as good a case can be made out for the merchant adventurer of modern times as can ever be put forward for the safety-first crowd.
I venture to say that if the capitalist system is to survive, it must be continuously refreshed by enterprises produced by the genius, the inventiveness, the calculation, the sacrifice and the audacity of individuals. We must not disparage or hinder new businesses making new work for the old unemployed. I can imagine a Governor of the Bank of England thinking first of the rentier class; I can imagine the Treasury officials, though I have not the slightest idea of suggesting that their's is the responsibility, keeping very prominently in their minds the state of the gilt-edged market, above all as it affects their short-term borrowings. Naturally that would be a great preoccupation with them. But the House of Commons, where all classes and all interests are represented, ought certainly not to take a view against the equity

shareholder or against the bold pioneer who, pushing through the crowd, reaps as his just reward what looks like an enormous prize.
If once you penalise the spirit of individual daring and initiative, if once you decide that that is to be discouraged—I am not suggesting that that is the attitude of the Government, but if once the course of legislation takes the form of suggesting that that is to be discouraged—then you are, in fact, abandoning the capitalist system, and you ought in all logic to go to the other extreme and weave the whole industry of the country into one vast structure under State planning. I am against that because I think it can be shown that it would be highlyinfertile, and that the mass of the people would be much worse off under an all-embracing bureaucracy and absolutely governed by Government Departments than they are at present with the wonderful, buoyant and apparently inexhaustible fund of personal energy, thrift and contrivance. I should much regret to see the Conservative party get into any position where it could be suggested that it took a hostile attitude towards adventurous, by which I mean novel, risky and speculative enterprise, for that would impede the new energies which each flood of youth contributes to our forward progress.
In my experience—a long one—and survey of this remarkable country and the life of Britain, nothing has struck me more than the numberless uncounted springs, rills and rivulets which flow unseen into the broad stream of national economy. If once you dry these up by some mechanical pump you may find yourself deprived in a night-time of resources which can neither be measured nor replaced. Therefore, I venture to think that this Conservative and National Parliament should make it quite clear that they have no prejudice against new businesses and rising businesses, no prejudices against adventurous or speculative enterprises, and that they should assert with courage that these businesses ought to have their profits under the law, and ought to make their way if they can—subject, of course, to the Income Tax, the Super-tax, the Surtax and the Death Duties.
With these, I am afraid, rather elaborate, but not wholly irrelevant preliminaries I would like to come more directly


to the issue before us. I listened very closely to the Budget statement. Up to the last quarter of an hour my impressions were the same as those of the rest of the House, namely, that my right hon. Friend the then Chancellor of the Exchequer was terminating smoothly and successfully the very remarkable process of rehabilitating our finances and providing with masterful ease the cash and credit necessary for re-armament. Indeed, after he had spoken for an hour I thought the whole Budget was balanced and done with. But in the last 15 minutes my right hon. Friend seemed to be opening up a whole vista of doubtful, superfluous and troublesome new matter which we have now come to recognise under the initials N.D.C. The House, of course, has realised from the first that the National Defence Contribution is not at all required under the finances of the current year, and I have not yet been convinced that it is required by the finances of next year, but I must say that some parts of the speech of the right hon. Member for Keighley (Mr. Lees-Smith), to which we have just listened, seemed to make out a rather stronger case for the anxieties of the Chancellor than I have yet heard put forward—I mean about the future. So far I have not felt convinced that this is required for the finance of next year, though I may be wrong.
I should like the House to think a little about the conditions of this Budget. It has one characteristic which makes it different from every other Budget. Budgets are usually the result of facts which are ungovernable and largely unforeseeable—the weather, the crops, the reaction of the sun upon the thirst of the public, the state of trade, the yield of various taxes, the arrival or non-arrival of windfalls, the javelins of death striking at hazard at the very rich. All these are the factors by which the Chancellor of the Exchequer is confronted, in a grim array, on the 3rst March, and with which in the following two weeks he endeavours to cope with all his apparatus of taxation. In this case we are not dealing with uncontrollable factors. The structure of this Budget is not shaped by external events. It has been shaped by the plenary discretion of the late Chancellor of the Exchequer. He it was who decided whether we were to borrow £500,000,000

or £400,000,000, whether we were to borrow £400,000,000 in five years or £500,000,000 in four years. He it was who decided what draft should be made upon borrowing in relief of Estimates and what must be defrayed out of annual taxation. It was a matter for his decision and discretion.
The House has not been told of any principle which governs the use of the Defence credits by any particular fighting Department. We have not been told what class of services are to be paid for on the nail, and what class may fairly be assigned to the use of Defence credits, though it looks as if the Departments had been told by the Treasury precisely how much they were to borrow in each case. Such manipulation is perfectly proper and is part of the management of a great undertaking, but none the less—and this is the point I make—it remains an entirely controllable process. In all £80,000,000 has been borrowed in aid of the armaments programme, but that is the result of the late Chancellor of the Exchequer's personal decision. It might as well have been £70,000,000 or £90,000,000; he could adjust it as he chose.
Similarly, when we came to the actual Budget we saw an item of £10,000,000 thrown in for Supplementary Estimates. That is an entirely novel practice. To mention Supplementary Estimates in a Budget was done, I think, last year, though I believe it has never been done before, at least I do not remember it; and anyone acquainted with our procedure will readily understand that it is a contradiction in terms. If the regular Estimates of the year are honest Estimates it is not normal to stick alongside them a Supplementary Estimate which says that they are a miscalculation. It is not to be regarded as a satisfactory process to place Supplementary Estimates in the Budget which would tend to loose estimating. No doubt h is prudent in times like these to leave a margin for Supplementary Estimates and excess spending, but that has customarily been done in the past by declaring a prospective surplus of several millions, which has a healthy effect, and also secures the necessary margin for what no human being can foresee.
I say frankly that I was astonished to see my right hon. Friend, in the Budget statement, slip in the remark that he


would allow £10,000,000 for Supplementary Estimates. Clearly that sum is only a guess. It might have been £8,000,000 or £12,000,000 or any other figure. The sum was £5,500,000 last year. No one can tell what the figure will be; that is what I am pointing out; and this was a figure my right hon. Friend chose to write. If he had chosen to make no provision for Supplementary Estimates he could have declared a balanced Budget showing a prospective surplus of £8,250,000, which would have had a very good effect, and would have left him with an ample margin for any normal contingency. That would have been an entirely straightforward and orthodox procedure, and would have rounded off the Budget very smoothly. But my right hon. Friend was not satisfied, and by this very anxiety—to follow out, I think, a train of thought which he pursued—he felt it necessary to produce a deficit so as to set on foot this new tax which he wanted for next year. Accordingly he threw in this £10,000,000 for Supplementary Estimates, which swamped the surplus he otherwise had in view, and showed a prospective deficit of £2,000,000, and this he declared it was our duty to meet by the National Defence Contribution. I am only laying these matters before the House because I can conceive a powerful justification being made for his action. But let us follow what is happening.
Our finances in the main are dealt with annually. We meet the troubles of one year with the resources which come to hand. It is extremely important that it should be realised that nothing in the present year requires this additional tax. If it is to be introduced, it is as a result of deliberate policy in fact, my right hon. Friend, as I said, went out of his way to create a deficit in order to drag in this tax by the heels. There is nothing reprehensible in it. Nearly everyone, I think, understands and sympathises with the motives of the late Chancellor of the Exchequer which led him to this tax. First of all, it proves the serious and grave view which he takes of the future of our affairs; secondly, it shows his habit of looking ahead; thirdly, it shows that he is not afraid, quite disinterestedly and without any immediate reward, to take upon his shoulders extra work and trouble; fourthly, it shows—I think this ought not

to be misunderstood—his resolve that every effort should be made to convince the munition workers, who are now beginning to be numbered by many hundreds of thousands, that he and the National Government of which he is the head are no champions of profiteering, and do not intend to tolerate it if they can possibly stop it. Those motives demand our respect, our general respect, but one may say and feel all that with sincerity and yet wonder whether the tax is, in fact, a good one or whether it will achieve the purpose which animated its author and with which we sympathise, namely, to provide effectually for the Defence programme.
Now let us see what has happened since the Budget was opened. Many things have happened. First of all, this particular tax has been riddled and shown to be virtually unworkable; secondly, an altogether excessive and exaggerated, but none the less costly, reaction has been produced in the markets and in industry; thirdly, both the parties of the Left, the Liberals and the Socialists alike, have denounced and derided the tax, so that it cannot be made very great use of in inspiring the munition workers; fourthly —[Interruption]. Well, I was Minister of Munitions during the War, and I know that if the Government cannot maintain a mental and moral relationship with those who are producing arms they may be confronted with the gravest difficulties. Certainly, this relationship requires the most careful study, and I am absolutely sure that that was the root of the process that led the right hon. Gentleman to this tax—fourthly, so many concessions have been made—have had to be made—that the yield, we were told yesterday, has fallen from £25,000,000 to something like £10,000,000 in the full year. Inevitably, in everybody's mind, is the thought: "Is not the business more trouble than it is worth?"
Let me now say that I hope that the free and full discussion to which Parliament is entitled will not be complicated by any question of personal prestige. In China, face-saving is usual, but it is less important in this country. Indeed, the successful avowal of mistakes was one of the most important arts in the armoury of the late Prime Minister, and one that was frequently practised to the discomfiture of those who had pointed out, with much precision and much toil, the error


which he had committed. The doctrine that the Chancellor of the Exchequer is infallible and that the Budget statement is one of the laws of the Medes and Persians has no foundation in our Parliamentary life. I seem to remember having heard that Mr. Gladstone, or perhaps it was Mr. Disraeli or some very eminent and respectable statesman in the past, said, when he was reproached for giving way on some point, something to this effect: "In a democratically governed country, possessing powerful, representative, Parliamentary institutions, it is sometimes necessary to defer to the opinion of other people." In House of Commons finance and on questions of ways and means, it is right that the Executive should, from time to time, yield to the sense of the House. In nine times out of 10, and 19 times out of 20, the Government will prevail; but their status will be increased and not decreased, if, on the tenth or the twentieth occasion, they bow to the opinion of the Assembly.
There were many such occasions in our history. There was Walpole, who, after the Division on the Excise Bill, came into the Chamber and said to his colleagues: "This dance can no further go." Then there was Mr. Lowe with his tax on matches "Ex lute lucellum." I myself remember Sir Michael Hicks-Beach, in 1901, when he increased the tax on cheques. We have got used to it nowadays, but in those days it seemed infinitely horrible; the shock was almost intolerable when the tax was raised from 1d. to 2d. He introduced this tax, which had a most chilling effect upon the Conservative party and the Liberal leaders. Two days later, I saw him come down to the House. I pushed my way through the crowd at the Gangway, which was enormous. It was a moment of great excitement and they said to me: "Black Michael is giving up the tax." But what happened? Was he regarded as having done anything wrong? On the contrary; he was praised. He was cheered. In those days, the Conservative party used to live, or at any rate, used to lunch, at the Carlton Club, and for weeks afterwards they were talking about the magnificent way in which Black Michael had extricated himself from this difficult situation, and of the courage and good feeling he had shown.
Perhaps the House may remember that only seven or eight years ago I got into some trouble myself about the Kerosene Tax. It was a very good tax. I was quite right about it. My right hon. Friend slipped it through a year or two later without the slightest trouble and it never ruined the homes of the people at all. Anyhow, the Chief Whip of those days telephoned me. I was resting in the country after the Budget speech. He said: "You had better come up. All our fellows are against the tax, and all the others too." I do not know whether any similar communication has been made by the present occupant of that most important office. Anyhow, I acted with great promptitude. I came up to London immediately. It was said to be very difficult to withdraw the Kerosene Tax; it was said to me by the experts, who so often turn out to be wrong, to be impossible to withdraw it without wrecking the whole of the oil tax, which was a very good tax. May I remind hon. Members that more than £50,000,000 from the oil tax is being derived this year? It was so much abused but, so far as I can make out, it has not stopped motoring. I came down to the House in the nick of time. Lord Snowden—Mr. Snowden, he was then—was rising, full of pent-up, overwhelming fury, to fall upon me. I got up. I withdrew the tax. Was I humiliated? Was I called weak? Was I accused of running away? Not at all. There were loud and prolonged cheers. Nor only did people say: "How clever how quick; how very well he has outwitted them"; but others came along and said: "How very right it is to meet with respect the opinion of the House of Commons." I hope you will pardon me. Mr. Speaker, for referring to those matters, but that was one of my best days.
How has this tax been examined hitherto? I am all for the Chancellor of the Exchequer being master of the Budget for the year; that is to say, he should present to the Cabinet in a very advanced condition his solution of the financial problem, as it is revealed when the accounts are closed on 31st March. It is a great advantage to this country that this decision is the project of one man's brain and not the result of a hugger-mugger disputation in a finance committee, such as you have in the French Chamber, where the Chancellor


of the Exchequer is surrounded by his predecessors, his rivals, and potential successors, and has to unfold all his plans to them. Although the general layout of financial policy should emanate in its full integrity from the Chancellor of the Exchequer personally, and should be submitted to the Cabinet only in its final form, there ought to be, and there nearly always has been, a special procedure in respect of new and novel imposts. I remember, for instance, that we sat for five months and had at least a dozen Cabinet Councils, on the Land Tax and Mineral Royalty duties. That was in 1909, and for five months those matters were continuously argued out. They were very important—important politically, anyhow, to us. When the Betting Tax, of inglorious memory, was being considered, a strong Cabinet Committee was appointed in November, and sat for over four months before they reported, wrongly, that, on the whole, it was worth trying.
It would be, in my opinion, a departure from custom, for any Chancellor of the Exchequer to present to a Cabinet, only a few days before the opening of the Budget, some great scheme of new taxation which had not been examined. When I say "examined," I mean by people who have the right and the mood, and are encouraged to criticise and pick holes in the plan. It is in the last degree imprudent to go into action upon a political or financial scheme which has not first of all had a good knocking about behind the scenes. It is only by that process that you can find out whether it can stand up to the battery to which it will, and ought to be, exposed when it comes to the House of Commons. New propositions ought to be tested and hammered out, and they ought not to slip through, easily from permanent officials —if that was where they emanated—to Minister and from Minister to the Royal Assent. Both the Cabinet and the House of Commons—in this I agree with the right hon. Gentleman opposite—have a real duty to test and prove them.
In this case, we know that, owing to the unhappy events of last year, there was held to be special need of secrecy, and we know that the Cabinet were not consulted upon the Budget until the day before the announcement. We know that the Cabinet sat on that day for only about

two hours. We do not know what other business there was. It is quite certain that it would have taken more than 40 minutes for the Chancellor of the Exchequer to summarise, even in the briefest manner, the financial proposals for the year, let alone go into the special details of this tax. No real opportunity, therefore, seems to have been afforded to the Cabinet of examining and, if they chose, of criticising or pointing out flaws in these new proposals. My right hon. Friend the new Chancellor of the Exchequer tells us that subsequently he has weighed them all in his capacious brain and finds them O.K., and anyone who heard him yesterday would feel that he has mastered all the details with his customary industry and efficiency. But I have also heard that he has had quite another set of preoccupations about the Treasury during these last few weeks, which may well have prevented him from giving absolutely unprejudiced and dispassionate consideration to this National Defence Contribution. I cannot, of course, say, but I do not think that at any stage in this business anyone who has been free and independent in the matter has had a chance, of bringing another point of view to bear.
Just as the great question of how much we should borrow for armaments and how much we should provide by taxation was settled by the then Chancellor of the Exchequer, just as the figure of £10,000,000 for Supplementary Estimates was interpolated in the Budget and settled out of hand by him, so this tax emanated from him, with the aid of only a very few confidential advisers with whom he felt himself at liberty to discuss it. He has told us of the great need of secrecy, and we all sympathise with that, but still it would have been much better, and, if I may say so, more in accordance with practice, to have a high degree of confidence and secrecy among Ministers and to be able to thrash these matters out in private among themselves before they are flung out upon Parliament and the country as the decisions of a united Cabinet and driven through with the force of a loyal party. I cannot, of course, speak with any authority upon City finance, but, taking a broad point of view, it would seem from all that is said that the check to enterprise, the restrictions on business, the fall in values, have already lost to the revenue far more than


the £10,000,000 or £12,000,000 which I gather is all that this tax is estimated to yield in 1937 and 1938 put together. Perhaps the loss is very much greater.
When we are told that there are 35,000 firms which must be rummaged from top to bottom, which must subject their whole method of life to the sharp teeth of the Revenue, which must be combed over from a different angle from that of the Income Tax collector, all for the sake of such comparatively small sums, the situation produced is one which certainly calls for very searching Parliamentary examination, and, I would add, for very serious Ministerial defence. When we are told that 11,000 of these 35,000 will probably be hit, but that whether they are hit or not, or how much they are hit, bears no relation to the class of work in which they are engaged or to the merits of their contribution to the process of national wealth getting, we must feel misgivings; and it is on these considerations that the decision that the House has to take will turn.
I have already referred to profiteering. Ministers boast that their costing system prevents profiteering in Government contracts, and they have assured us that their view is confirmed by the Public Accounts Committee; but I am not so sure that profiteering is entirely excluded. I think that the whole question requires careful vigilance. But why all the ordinary business of the country should be dragged into the tax collector's machine and re-rummaged for this purpose, I cannot conceive. Certain it is that the Socialist party are unable to accept the tax as any assurance that there is no profiteering. I should deprecate the imposition of a tax merely to satisfy our political opponents, but it gives them no satisfaction. They have already derided and denounced it. Both parties of the Left are going to vote against it. It certainly seems to be bad finance, but is it not bad politics too?
Our Parliamentary procedure is built mainly around finance. All financial proposals are, of course, subject to special stages of elaborate discussion; the House will have ample opportunity of resisting or reshaping the new tax. Therefore, there can be no need for any supporter of the Government to vote against the Finance Bill as a whole; indeed, I think there can be no excuse for it. We must

all remember that the Finance Bill is the sole vehicle which carries supplies of money to National Defence. Therefore, there are far better opportunities of dealing with this tax in Committee. Then will be the opportunity, if we desire it, to vote against a particular tax entirely separated from the rest of the Budget; then will be the opportunity to vote for some special improvement: and I hope and trust that we may be met in some way in the matter then, if the worst comes to the worst. But no one who wishes to see the rearmament programme carried out, and who is pledged to that, will think of giving an adverse vote upon the Second Reading of the Finance Bill. [Interruption.] Hon. Gentlemen will be disappointed if they have any hopes of that. The arguments are so overwhelming that any Conservative supporting the National Government and supporting the Defence programme is absolutely bound to vote for the Second Reading of the Finance Bill; and he is absolutely free to do so, because the future is left entirely at his disposal when we reach the Committee stage.
I have pointed out some of the changes which have occurred since the tax was first announced, but there is one still greater change which I have not yet mentioned. The Chancellor of the Exchequer has become Prime Minister; and, the more one understands his point of view in the early stages of this tax, the more one feels that he ought to change it now. I can understand him, as Chancellor of the Exchequer, taking the view that he did, but as Prime Minister, with the whole weight and burden of these hazardous times upon his shoulders, he is in an altogether different position. His success in his new office is a matter, not only of party, but of national importance. We all want him to have a fair start. He has a perfect right to take a new decision, and in my opinion he is bound to do so. The only trail worth following at any given moment is the well-being of the nation. The Bible says: "Lay aside every impediment".—[An HON. MEMBER: "Weight."] I have the quotation here. In spite of my knowledge, I am always glad to refresh my memory. It says:
Wherefore seeing we also are compassed about with so great a cloud of witnesses, let us lay aside every weight, and the sin which doth so easily beset us, and let us run with patience the race that is set before us.


It also says:
If thine eye offend thee, pluck it out.
I hope the Government will not degenerate into half measures, quarter measures. I hope that we shall not have a draggle-tailed, tattered tax forced through sulky Lobbies, while the great mass of the trade and business of the country stands agog and agape, with recovery impeded and the Session spoiled, all for the sake of a beggarly £10,000,000 out of a Budget of over £800,000,000. That matter is urgent. Every day's delay will be damaging to the credit of the Government; every day's uncertainty will hamper business and rob the revenue. I believe that the new Prime Minister and the new Chancellor of the Exchequer will be right and courageous if they drop the whole thing, and if they make a virtue of dropping it, if they drop it in the grand manner, if they drop it now. By so doing they will return to the canons of sound finance, they will restore and revive public confidence and enterprise, and they will, I venture to say, even recover a large proportion of the losses which have been incurred. So far from being impoverished, they will be enriched; so far from being humiliated, they will be strengthened; so far from neglecting the future, they will find themselves in a better position to cope with it. I hope that my right hon. Friend, at the outset of his Premiership, will show the flexibility and resiliency of mind, and the necessary detachment from personal and departmental aspects, to enable him to take the simple, bold, manly decision which good sense, Parliamentary opinion, and, as far as I can judge, the interests of the nation, urgently require.

5.28 p.m.

Major Owen: I am sure the House will sympathise with me in attempting to follow the right hon. Gentleman the Member for Epping (Mr. Churchill), who, in a speech so humorous but so devastating in character, has destroyed the last vestige of support for the proposals of the National Defence Contribution scheme. The House, I readily believe, fully sympathises with the Chancellor of the Exchequer, as he then was, in the problems that he had to face. With the increasing expenditure that was required in order to deal with the rearmament policy, he also had to face the fact that, apart from general recovery, a special recovery was

taking place in industry, due, directly in many cases, indirectly in others, to the increased expenditure on armaments. The prospective profits of industry, it appeared to everyone, were being affected by the large sums of money that were being spent in all directions on armaments. There was also the difficulty of the propaganda which had been taking place throughout the country against profits from armaments and against the private manufacture of armaments. In those very serious difficulties, it is not surprising that the Chancellor of the Exchequer had to look around for a new source of taxation. But the House, I think, feels generally that his attempt to deal with that position has been most unsatisfactory.
The method he adopted was to resurrect the old Excess Profits Duty under another name, and with a graduated instead of a flat rate of duty. I think it is generally felt throughout the country that his answer to the problem was totally incorrect and a blunder of the first magnitude, and I rise to follow on the same lines as the right hon. Gentleman the Member for Epping in pressing upon the Prime Minister and the Chancellor of the Exchequer to withdraw these proposals before more harm is done to industry generally. A good deal has been said about a good tax. Perhaps the Chancellor will be a little cheered by a quotation from Burke:
To tax and to please, no more than to love and to be wise, is not given to man.
Still I think a good definition of a good tax is one which will be cheap to collect, fair in its incidence and readily understood by all. By every one of these tests, at any rate, the National Defence Contribution is a bad tax. I have tried, as I think many others have tried, to find some good points in it. I will refer to only one or two. It probably appealed to the Chancellor of the Exchequer on the ground that it might lend itself to the painting of an alluring picture of the Government's determination to deal with profiteering from rearmament. Another one is to give the Government and its successors a new taxation framework and some idea of the capital sunk in industry which might be useful in connection with a capital levy later on. Thirdly, it would be possible after some experience to


modify the rates of duty from year to year as the rise and fall of armament expenditure might require, and, as a friend of mine told me the other day, this in effect would give the contributor a reversionary interest in peace.
Let us take, first of all, the political aspect of the tax. This, I think the House will generally agree, is what led to its selection in the first instance—the taxation of armament profiteers. The late Chancellor of the Exchequer thought he had found on Old Master but, as so many others have found, the Old Master is only a fake, and the political effect of the new tax has been less than nil. With regard to its usefulness for the purpose of framing fresh taxation in the future, whatever information might be obtained through all the calculations which will be necessary in ascertaining capital and so on, the information which will be obtained must for technical reasons be far removed from reality and in any case will be most incomplete. As to the yield, originally we were told it was going to yield in a full year £25,000,000. Now it has been reduced to £15,000,000, and after various deductions it will be something between P£8,000,000 and £10,000,000. Therefore, that point in favour of the tax goes overboard with the others and there is nothing left to justify its imposition at the present juncture when industry is beginning to revive from the trough of the depression in which it has found itself for so many years.
I appeal to the Chancellor and the Prime Minister at this eleventh hour, although we have had only a day and a-half of discussion of the Bill. When the land taxes were discussed in 1909, the Government of the day allowed four days for their discussion. From the point of view of Parliamentary custom and procedure this is a really serious point. No Government has a right to bring in a tax of this kind, which makes fundamental differences in our fiscal policy, at such short notice and on such short consideration. This, I think, is a further reason why the Prime Minister and the Chancellor should reconsider their decision, make a brave show of it and withdraw the whole proposal.

5.36 p.m.

Mr. Simmonds: My right hon. Friend the Member for Epping (Mr. Churchill)

has given the House a number of reasons why the Prime Minister need feel no hesitation in withdrawing this tax and, if we cast our eyes back since the date of the Budget statement, there is another and an important reason which possibly my right hon. Friend overlooked. It is that in the early days after examination of the National Defence Contribution a large number of representatives of trade and industry inside and outside the House told the Prime Minister, as I believe, in the thought that they would make more easy a redrafting of the National Defence Contribution, that in fact the principle was right. After we have had an opportunity of re-examining particularly the revised form, there is almost unanimity that the principle is wrong, and, however much the Chancellor may redraft its details, this wrong principle must in fact remain.
Coming from Birmingham, where industry has passed through the deep gloom of depression in the last few years, if I may analyse the thoughts of industry there, perhaps the Chancellor will appreciate the intense indignation that the tax is causing in industrial centres. Whatever may be the principle—it is announced as a tax on the growth of profits —the fact remains that the principle as seen by industry is that those firms and companies which have been consistently prosperous during the last few years of depression will pay almost no tax whereas the full force of the tax will fall on others which almost closed down in many instances, so difficult has it been for them to obtain orders—companies which are now gradually ascending the hill of prosperity. When in a great city such as Birmingham industry sees certain companies which have been making vast profits—I can think of one great company which for the last three years has made 100 per cent. profit almost every year—does industry think that those companies should be passed over by the National Defence Contribution whereas other firms which have almost gone into liquidation but are now cheering up again should bear the whole weight of this contribution?
May I turn from the issue in the country to the issue in the House? Mr. Baldwin spoke on a very large number of occasions of the nature of our democratic institutions, and the point that he always dwelt upon was the absence of force in our Constitution. Indeed some of the


legislation that we have passed during the last 12 months has been to prevent force entering into the political life of the country. I think that also applies in the deliberations of this House. It must be manifest that, if the Government will not reconsider this National Defence Contribution, it will be forcing the proposal through in face of the opinion of the House and of the country. The Chancellor said yesterday that no tax is good. That may be, but it can be said that there are many taxes which are not unwise, and certainly there are very many more which are not unjust, and it is because industry, and a much wider circle in the country far removed from industry, regard the tax as unjust, that we make a particular plea at the commencement of a new regime that we should see some vast modification if not a withdrawal of the tax.
I agree whole-heartedly with my right hon. Friend the Member for Epping that there is no reason why the Prime Minister should not take his courage in both hands and withdraw the tax and, speaking, as I do, as a humble representative of the city which the Prime Minister also represents, may I say to him that in his own city, where his advent to the greatest office in the State had been looked forward to with so much hope and promise, an immense load would be lifted from our shoulders if even at this hour he would bow to public opinion both in the House and in the country and withdraw the tax?

5.44 P.m.

Colonel Wedgwood: One of the advantages of our democratic institutions is that, even if you are in a minority of one, you are allowed to speak in this House. I hope to be ultimately supported by one on the other side, but at least I may state my case for this N.D.C. Let us realise where we are. £500,000,000 is being borrowed to spend on armaments. We have already seen a certain amount of that money spent. Shares in the aircraft building companies have rocketed. Companies which were paying no dividend two years ago, or perhaps 5 per cent., are now paying 100 per cent., and are contemplating far higher dividends when they have cut the melon and are able to conceal their enormous profits by paying a lower rate of interest on a higher capitalisation. This is going on all over the country, not

merely in aeroplane manufacture but particularly in the whole of the iron and steel trade, and very largely in the building trade, in the building of new factories, and in all subsidiary work in connection therewith.
The Government are contemplating spending in the next five years £1,500,000,000 in exceptional ways, much of which eventually must stick in the pockets of the lucky people who get the Government orders. I do not say that it is a perfect way of getting money. But the Government will have infinite difficulty with the workpeople employed in these industries if profiteering on this scale goes on. You cannot expect men to be content to draw the same wages whether a company is paying 10 per cent. or 100, 200, and 250 per cent. We saw it all particularly during the War when we had D.O.R.A. invented to prevent strikes and to prevent people securing for themselves some share in the swag. That, I take it, is the reason why the Chancellor of the Exchequer and the Prime Minister introduced this tax, and if he drops it he will not escape the denunciation from the Labour party and the natural reaction of the people working in the war industries, nor, I add, will he secure the respect of all those other industries which are getting no benefit from the war orders and from this artificial boom that has been created.

Mr. Bracken: The right hon. and gallant Gentleman says that the Prime Minister will be denounced by the Labour party, but has not the Labour party already denounced the tax?

Colonel Wedgwood: I will deal with that presently. I was saying, when I was interrupted by the hon. Gentleman, that the large majority of the manufacturers in this country will resent it most bitterly if this tax is taken away and another tax is imposed which will fall upon all, upon the unprosperous as upon the prosperous. Really, we have to consider at the present moment the alternative. What is the alternative to the Government's tax? It was a shock to hear my hon. Friend the Member for Bishop Auckland (Mr. Dalton) advocating an alternative which apparently he had learned from the City editor of the "Daily Herald," on the ground that the City editor of the "Daily Herald" was a Fellow of All


Souls. I learnt my political economy not at All Souls, but in this House of Commons. When I considered the alternative of the gentleman from All Souls which had been adopted by the hon. Member for Bishop Auckland, I felt that the House of Commons had better go back to some of the old-fashioned economics which we used to talk 20 years ago in this House.
What is the idea? It is, that, instead of putting this tax upon people who are making excessive profits, you must accept the offer of the City editor of the "Daily Herald" and of the people who wrote that letter to the "Times," and impose instead the old Corporation Profits Tax, which we knew so well only 15 years ago. That was a tax on the profits of all firms. I have no doubt that it would bring in more money, but would it have the same effect, first of all, upon profiteering, and, secondly, upon the people of the country as a whole? Really, it does not ever matter who pays the tax in the first instance. What does matter is upon whom the ultimate incidence of the tax falls. It may be old-fashioned political economy, but, surely, we all know that when a tax is laid upon, and paid by, the importers of tea or sugar, or wheat, the person who pays the cheque is only the nominal taxpayer, and the tax falls upon the consumer, upon the people who drink the tea or eat the sugar. In all taxation you have to consider who is the ultimate person who pays.
This alternative which was advocated by my hon. Friend the Member for Bishop Auckland and by the spokesman of the Liberal party, and, of course, welcomed by the Forty Thieves, and I believe, by my hon. Friend behind me, the alternative that we should have the Corporation Profits Tax, is advocated frankly by right hon. Gentlemen and hon. Gentlemen opposite because it can be transferred to the consumer. It will be just as well that we should realise the aims and objects that are behind our temporary allies opposite. My right hon. Friend the Leader of the Opposition will remember that, when the Corporation Profits Tax was imposed, it was, in the first place, put upon all profits, and promptly the railway interests rose in this House and pointed out that if it was levied upon the profits of railway companies, the railway companies could not pass the tax

on, and that, therefore, it was unfair and unjust that they should have such a tax levied upon them. No sooner was there a protest made than the Chancellor of the Exchequer at the time saw the point and relieved the railway companies of the tax because they could not pass it on, and could not push up the fares and rates which were under statutory control. Now this profits tax is being welcomed.
The big business people who write to the "Times" say that they are willing to have the Corporation Profits Tax instead of the Excess Profits Duty. The reason is quite simple. A tax upon profits can be passed on to the consumer, and it will increase the cost of living. A tax on selected persons who are making large and exceptional profits because of Government orders cannot be passed on, and rests where it was originally put. That is the only difference, and it is the reason why there has been this prolific opposition to it in the City of London. This N.D.C., they say, is a tax which cannot be passed on, and, therefore, it is an unjust tax; because they cannot collect the money from the consumer they are being penalised. There is doubt as to whether the Income Tax can be passed on, but there is less doubt that Death Duties cannot be passed on. Certainly a tax on land values could not be passed on. I ask the House to note that every attempt to tax land values has been met by just such a storm as this from just the same people, and my hon. Friend the Member for Bishop Auckland has exactly the same views on that as he has on this. Thanks to the hon. Member for Bishop Auckland and the hon. and learned Member for East Bristol (Sir S. Cripps) the taxation of land values has been removed from the Labour party's policy because it could not be passed on.
Now the whole House is rejoicing in the idea that here is an alternative tax that will bring in more money, and which will please everybody except the unfortunate people who have ultimately to pay it. The other alternative is to put an extra 3d. on the Income Tax. That will mean, of course, that all the people with fixed incomes will contribute to the profits of the warmongers who are making the gigantic incomes. Just at the time when the cost of living is going up and equity shares are rising everywhere, and when fixed incomes are bringing in less and less, the whole House are making the people


who are suffering pay more in order to remove the burden from those people who are exceptional profiteers. There is a third alternative—that of the right hon. Gentleman the Member for Epping (Mr. Churchill)—which is to do nothing at all except inflate, which is just another way of increasing the cost of living and making the poor pay. We had much better be honest and get the money from those now in an exceptional position to benefit. I am certain now that we have an alliance between the Labour party, the Liberal party and the Forty Thieves, and the right hon. Member for Epping, and even an hon. Member from Birmingham apparently, the Government will execute the usual skilful strategic movement to the rear.

Mr. Bellenger: May I inquire who the Forty Thieves happen to be?

Colonel Wedgwood: I thought they were known by now, but they are particularly interested in big business, and they get their way inevitably. My main object is to impress upon the House that the Corporation Profits Tax is thoroughly bad, and that inevitably it will be passed on to the consumer at a time when the cost of living is going up, certainly by 10 per cent. I do not know whether anybody in the House doubts lit being passed on. I will take the case, for instance, of the Potteries. There are a great many small pottery firms. If you put a tax on their profits, all similar factories are taxed equally so much per cent. on their profits and they all suffer equally, much as they do from the rates, with the result that they can all put up their prices, because nobody is specially exempt and therefore able to cut their profits. As the tax goes up, the cost of production goes up. The tax is added to the cost of production of the article, and as far as the home market is concerned the whole of the tax is paid by the consumer; but as far as the foreign market is concerned, it is not so easy. The Corporation Profits Tax can be recovered from the home consumer, but it cannot be recovered from the foreigner, with whom you are in competition.
So that tax is not merely passed on to the British consumer, but it injures very materially all those industries which have a foreign export trade. They are hit particularly because they have to pay the tax on their profits, whereas their competitors abroad or in the Dominions

are not paying the tax at all. While they can recover from the home market, they cannot recover from the foreign market, so that in order to make good they have to sell at two prices. They get a bigger price on the home sold article, and sell at a lower price to the foreigner, whereby the consumer in this country is conferring a permanent benefit upon, and paying hard cash to, the foreigner all the time. I remember the time when we built up the jam trade in this country because France and Germany both gave large bounties to sugar exported abroad. We got cheap sugar and we established the jam manufacturing trade in this country. Under the Corporation Profits Tax exactly the same thing happened. But what would have happened under this exceptional form of tax that the Chancellor of the Exchequer proposed? Selected factories make exceptional profits because they have a monopoly. They would have had to pay the special tax. They would not be able to raise their prices, because of competing factories which had not that monopoly. Their untaxed activities would keep the prices down. Therefore, that tax could not be passed on to the consumer. It would be paid for by the monopoly owners.
The right hon. Member for Epping in that admirable conclusive speech in which he slew the tax, himself pointed out that there was some distinction in this world between monopoly and capital. If we tax monopoly, monopoly cannot pass the tax on; monopoly pays the tax. If we tax capital, the tax is passed on to the consumer. It is because the proposed tax has in it something of a tax on monopoly that I support it, and I hope that we shall vote for it. I have always stood in this House for taxation of the fundamental monopoly of land, and because this tax is something of that nature I welcomed it when it was brought forward, although I doubted even then whether the Government could possibly stand up to the coming storm. I hope that some day we shall see the triumphant vindication in this House of the taxation of monopolie's as the only sound system of taxation.

6.3 p.m.

Colonel Sir John Shute: I do not often intrude myself on the notice of the House, but as one who has been engaged all my life and am still engaged daily in industry and commerce, both as


partner in a private firm and also as chairman of one of the great groups of Lancashire cotton mills, and also as representative of a division in Liverpool in which the whole of the commercial exchanges are situated, it is only right and proper that I should take part in this Debate to register my emphatic protest against that portion of the Finance Bill which deals with the National Defence Contribution. I do not wish to detain the House unduly long, because much of what I should like to say has already been said. I listened with interest to the most brilliant speech of the right hon. Member for Epping (Mr. Churchill), and it would be almost supererogation on my part to add anything to it, because I am in entire agreement with almost the whole of his speech.
I should like to say a few words in regard to the cotton trade in which I am engaged. In yesterday's Debate the cotton trade was mentioned and the hope was expressed by one hon. Member that someone connected with the cotton industry would speak. Having been engaged in that trade all my life I am entitled to speak on this subject. Our trade is divided into two portions, one portion, the raw cotton end, being centred in Liverpool and Manchester, while the spinning part of the trade is carried on in other parts of Lancashire. It is notorious that during the last to years great numbers of firms have gone out of business because of the losses they have suffered and the heavy depletion of their capital. That state of affairs applies to many firms which had been in existence for a large number of years and had provided employment for many people. Other firms managed to struggle through the last Do years, eating into their capital, and desirous as far as they could of retaining their business and keeping on their employés. These are firms which will be seriously hit if the projected tax goes through.
Since the presentation of the details of the projected tax the Liverpool Cotton Association, of which I am a member, called in the services of three leading auditors in the City and asked them to prepare a report as to how the tax would affect many of the firms engaged in the cotton business, and it is interesting to note the sequel to that examination. The

accounts of 20 to 25 representative firms in Liverpool were examined. During the last nine years the best year of those 20 to 25 firms gave combined profits aggregating £683,000. The average of the three years as originally proposed by the Chancellor of the Exchequer showed aggregate profits of £248,000, or practically one-third of the best year of the nine. In 1936, which must be to a great extent an estimate, the aggregate profits are likely to be £377,000. If we reckon the figures on the basis suggested by the deputation to the Chancellor of the Exchequer, the average of two years out of six or three of the best years out of the last nine years, the figures vary from £440,000 in the first case to £534,000 in the latter case. I mention these figures to demonstrate the fact of the enormous difficulties with which one is confronted when one starts to try and get a datum line of business which had to be carried on during the very difficult times of the last 10 years.
Let me turn now to the question of trying to arrive at a datum line based on capital. Here again the position seems to me, as a business man with a knowledge of a great number of firms, to be very difficult. I ask myself what is the capital of a private firm. The capital of the firm of which I am a member is everything that I, my partner and my partners possess in the world, right down to our households, and the contents of our households because, naturally, behind the name of the firm has to stand everything of which we stand possessed in the world. While what have said is strictly true the capital in the company is by no means the total wealth of the partners. It is very often only a small quota of that wealth because, as I have said, behind that capital is the whole of their personal wealth, which stands behind the contracts that they make. With regard to the cotton business the technique of that trade is such that a firm with comparatively small capital can, by the process of utilising the "futures" market, as temporary hedges for purchases of cotton made for ultimate sale to the trade, carry on a much larger amount of business as represented in capital value than would seem to be justified from their capital. That is because they are able to raise bank advances upon the security of the commodity to be imported, pending resale.


Sometimes the advances are to the extent of 90 per cent. of the value.
In many instances, also, the utilisation of these enhanced credits, based on a comparatively limited amount of actual cash capital, does not actually become effective because the capital has been raised by means of what is known as 60 to 90 days bills or drafts. Very often before these drafts mature the cotton is sold to its ultimate user, that is, the spinner, and the whole transaction is closed without the necessity of actually utilising the total amount of the prospective loans. That process is repeated according to the convenience of the market. In the course of a year these operations are continuous and are governed only by the exigencies of the markets and the rapidity with which cotton so bought is sold to the spinner. In the course of a year the actual turnover of a firm which may have actual cash facilities of only £8.000 or £10,000, may run into many hundreds of thousands of pounds, perfectly legitimately.
There is another aspect of the question to which I would draw attention. It is one which has come under my immediate notice. During the last few years, owing to the circumstances of which I have spoken, many firms found themselves unable to function owing to the great depreciation of profits, which were out of all proportion to their overhead expenses. Consequently there has been a movement to amalgamate smaller houses into joint partnerships, which has resulted in cases known to the Income Tax people in Liverpool in which firms which might previously have contained in their separate existence one or, at most, two partners find themselves combined in one firm of seven or eight partners, in order to cut down operating expenses. The Chancellor of the Exchequer in his original suggestion very rightly and generously decided that those firms or companies with profits of less than £2,000 per annum would not be subjected to this new impost. I would suggest that in any further alteration of the tax that £2,000 should not only relate to firms in circumstances such as I have quoted, but should also relate to the individual members of such firms which have combined for the purpose which I have outlined.
There is another point. During the last few years we have accumulated many bad debts due to the difficulties abroad, exchange restrictions, and the general depression in business. The point arises as to how these can be dealt with equitably. There is always the hope that such bad debts having been written off in any one year, thus reducing the normal profits for that year, might conceivably be recovered owing to the general improvements in trade—we are always optimistic in the cotton trade and have tried to keep going in the hope of improved conditions—and if they are to be added back in a year of recovery a firm finding itself in such a position would be mulcted twice. It would be mulcted by the reduction of their average arriving at the datum line and also by the enhanced profits which would appear in later years, the datum line having been previously established.
There are other minor points in relation to the cotton business which will have to be dealt with in Committee, such as the question of employés starting business on their own account or joining a firm in partnership with a little capital, which may be supplied by the firm. The question is whether these employés ought not to be dealt with in a special manner. I could quote many instances.
There is no need to tell the House what is unfortunately too well known—the disastrous years which the Lancashire cotton trade has gone through. The stories of its deficits and profit and loss accounts are sorry reading, but those directly interested can say that they now see daylight at last coming through the gloom. The improvement in the trade has been brought about to a great extent by a rise in commodity prices throughout the world. All Governments have been consciously working towards that end, and very rightly so, in order to provide a better margin between the costs of production and the selling. values of commodities for the producer: That has more than anything else tended to improve the condition of the textile trade, aided to some extent by understandings which have been reached to prevent internal price cutting, which has been the curse of our trade for so many years. It may be true that in many instances where the capital structure of the mill has not been altered a datum line based on the capital may not prove unduly harsh. We should not in some cases be badly hit. That is


true, but many mills and combines, for reasons which have appeared good to them, have reconstructed themselves during the last few years, and we all desire to know on what basis of capital the datum line will be founded. As to the value of the assets, how would the valuation of assets be taken? Would it be at what they stand in the books to-day as reconstructed groups of mills, or the replacement value of the mills if they had to be reconstructed. In many cases debentures have been issued but no interest has been paid or even earned upon them. I am not quite clear whether these debenture issues will be counted in the basis on which capital standard profits can be earned. These are matters upon which I hope we shall have some elucidation.
It is idle to contend, as I have heard some hon. Members contend, that the outburst against this tax is manufactured, primarily by the Stock Exchange and those people who are disgruntled at having lost money in the last slump. I am not a speculator and am not interested whether stock market prices go up or down, but I say that it is idle to contend that the opposition has been manufactured. Only within the last five days a meeting took place under the auspices of the Associated Chambers of Commerce in London, at which all the great firms of the country, including the association to which I belong, came to the conclusion which I cannot better express than in the words used by the Manchester Chamber of Commerce—
It was emphasised again that there is no unwillingness to subscribe to the principle that the sum in question, which is part of the burden of rearmament, should be found by industry out of profits, but an examination of the Finance Bill has deepened the conviction of the Chamber that the new tax is not a satisfactory method of giving effect to that principle.
I agree with that view. I believe that the boldest plan is also the wisest, and that is for the Government absolutely to withdraw the tax and remodel it entirely. Industry knows that it will have to pay this extra sum of money. We have known it ever since the decision was come to, all too late as some of us think, to bring the defences of our country up to the desired standard. We knew that industry would have to bear, and rightly bear, further taxation to supply the money which the Chancellor of the Exchequer would

naturally want. We have no complaint on that score. The Chancellor of the Exchequer said yesterday that no tax is a good tax. We hate taxes and wish to avoid them. But if no tax is a good tax there are taxes which are fair, and those are the taxes which we want imposed. This is not a fair tax; indeed it is a bad tax. It is not a tax on prosperity so much on those trades which after years of depression are gradually arising out of the sea of depression and are now rehabilitating their capital which has been so badly missing for a long period of time. I trust that even my last few words will impress the Chancellor of the Exchequer. I would ask him to believe that it would have a great effect on the country, and help towards its further recovery, which surely he must desire, if he would announce absolutely the withdrawal of the tax to-night. I hope that the Chancellor of the Exchequer or the Prime Minister, who has done so much to help us to get back into the better times which are now coming within view, will go one further step to assist us by absolutely withdrawing the tax, and thus earn the undying gratitude of the bulk of the industries of the country.

6.29 p.m.

Mr. Barnes: The reception which this Budget has had is unprecedented in the history of this House. I have heard II Finance Bills introduced, and this is the first occasion on which I have witnessed the Government virtually defeated on the Second Reading of a Finance Bill. I do not propose to spend much of my time discussing the National Defence Contribution, because I anticipate that very shortly the Prime Minister will bow to the wishes of the City of London. When we know the fate of this particular tax I suggest that we can turn from the conditions in the City of London to the conditions of the people. The Amendment which has been moved from these benches certainly proposes to deal with that aspect of the Budget. I regret that the tax which has been proposed should have obscured consideration of a Budget which levies taxation of £900,000,000. Despite the immensity of that sum, it fails to meet our national obligations. In this Budget, £333,000,000 is raised by indirect taxation and £452,000,000 by direct taxation. Despite those enormous figures, the Government propose to borrow £80,000,000. They have upset finance


and industry, and have failed to meet our debt obligations. In his Budget statement, the right hon. Gentleman admitted a saving of £40,000,000 a year on a previous conversion, but the whole of that amount has been eaten up in the Budget and there is still no provision for debt redemption.
In the case of the 11 Budgets that I have heard introduced in the House, there has been no other occasion where the consequences of the Budget have been so overshadowed by a prospective tax, and where the situation has been that before the Finance Bill receives its Second Reading, the Government are compelled to go back on their major new tax proposal. I think this illustrates very clearly the different standards prevailing in politics and industry, for in industry if a person had been responsible for the muddling which has occurred with regard to the Finance Bill, he would have got the sack. Instead of that, the Conservative party has raised the Chancellor of the Exchequer to the Prime Ministership, although I think that if it had happened six months ago there might have been some doubts. I cannot help contrasting the present attitude of the Press, the House of Commons and the City of London with their attitude towards the Labour Government in 1931. I trust that the people at large will recognise that this is the second time that the City of London has intervened in the framing of a Budget, although on this occasion it prefers a different method of defeating the Government from that of forcing a General Election.
The record of the National Government is one of rising national expenditure, rising taxation, rising prices and rising profits. [Interruption.] I emphasise that statement. [An HON. MEMBER: "And rising wages!"] I will deal with that point later in my remarks. I do not think it can be disputed that this tax, which so much concerns hon. Members, is the Government's first effort to deal with rising prices. Let me, in the first place, deal with the Government's policy as regards taxation as it affects the masses of the people. In introducing his Budget, the right hon. Gentleman confessed that in 1936–37 he received in indirect taxation £17,500,000 more than he did in 1935–36, and in this Finance Bill the Chancellor is anticipating another in-

crease of £12,000,000 in indirect taxation; that is to say, an increase of £30,000,000 in two years in taxation on goods, mainly foodstuffs, which the masses consume.
With regard to the record of the Government in the matter of rising prices, I would like to refer to the speech of the hon. and gallant Gentleman the Member for the Exchange Division of Liverpool (Sir J. Shute), who seemed to find some cause for satisfaction in the rise in commodity prices. Such a rise may be of value if it is natural, but I submit that if it is artificially stimulated by vast armaments expenditure, and is not created by a natural increase in the purchasing power of the community, it is not a healthy sign for industry, but is merely storing up trouble for the, future. During the last 12 months the cost of food has increased by 7 per cent. With regard to the rise in wages, I will emphasise, first, that taxation has increased by £30,000,000 on this class of the community, that the cost of living has increased by 7 per cent. during the past 12 months, that wages have increased only by 1.5 per cent., and that the general average of profits has increased by 13 per cent. Hon. Members should consider those four figures in relation to one another. They mean that real wages—the buying power of wages—have actually declined by 3 per cent. during the last 12 months. That is one of the reasons there has been no enthusiasm on this side of the House for the Chancellor's proposal. If the proposal had represented a real effort to grapple with the problem of profiteering, the right hon. Gentleman would have had support from this side of the House and from the country as a whole.
The difficulty in which we find ourselves is that the general rise in prices, which is leading to wholesale speculation, is not covered by the proposal and is not intended to be covered by it. How can such prices help the economic life of the country? I will give as an illustration the percentage rises in the prices of a number of commodities from 13th May, 1936, to 11th May, 1937, and I would point out to the House that those are the prices after the proposal for the National Defence Contribution had been published, so that it cannot be argued that they are fictitious prices. Copper has increased


by 35 per cent., lead by 45 per cent., tin by 21 per cent., timber by 28 per cent., motor spirits by 10 per cent., wool by 38 per cent., and linseed oil by 31 per cent. During 12 months, there has been a rise in commodity prices ranging from 20 to 45 per cent.
What we protest against is the definite policy of transferring the burden of taxation from the rich to the masses. From 1930 to 1937, years which cover the whole period of National Government in this country, indirect taxation has been increased to the extent of £87,000,000, whereas direct taxation has increased only by £42,000,000, and within the latter figure I have included the increase of 3d. in the Income Tax which is imposed in this Budget. If one further analyses the position, one sees that the burden of taxation is still more unfair in its incidence. In the earlier part of their administration, the National Government lowered the exemption limit in such a way that they brought 1,000,000 more persons into the Income Tax-paying class, those people being the higher wage-earning groups and the lower middle classes. By bringing those 1,000,000 persons within the Income Taxpaying class, the Government further accentuated the inequality to which I have referred. Moreover, they lowered the exemption limit from £162 to £125 a year, which means that the well-to-do section of the community is not in any way bearing its fair proportion of the increased expenditure embodied in the Budget.
I will now bring my remarks to a close. [Interruption.] It is not very often that I take part in the Debates in this House, and I would remind hon. Gentlemen opposite that it is the provilege of the Opposition to put down Amendments to the Finance Bill. Hon. Members opposite have occupied the bulk of the time in talking about the tax in which they are particularly interested, and which I venture to suggest does not concern the masses of the people very much. Although I have given an undertaking that I will finish my remarks at a certain time, I do not intend to be shouted down, and I propose to make my speech in my own way. A reasonable test of a Budget is the charge that it represents on the pro-

ductive values of industries. I feel that points of that sort have not been given sufficient attention in our post-War financial Debates. Before. the War, the whole of the taxation of the country, both State and local rates, represented a charge of 7 per cent. on the productive value of our industries. The charge of national taxation and local rates now represents £13 out of every £100 of goods produced in this country. We cannot continue to increase this overhead charge on British industry without serious effects on our export trade on which the country so much depends.
Another phase of the problem of rising commodity prices is the effect on local rates and local social services. For instance, consider the cost of housebuilding to local authorities now as compared with 12 months ago. While there has been an increase in the number of houses for sale which have been provided, hundreds of thousands of houses for letting are still required before we ca n claim to have provided a solution of the housing problem. One of the disastrous effects of the Government's policy of forcing up commodity prices has been to increase the cost of building working-class dwellings by 25 per cent. and that is likely to slow down the provision of houses, especially by municipal enterprise. Then there is the cost to local authorities resulting from the rise in food prices. The Glasgow Corporation bill for food alone for its hospitals and institutions has increased by £26,000 in the past year.
Important as the sum of £15,000,000 involved in the National Defence Contribution may be, the House of Commons cannot consider a Bill involving £900,000,000 of taxation without considering also the reactions of the policy which lies behind it, a policy which is starting us once again on the vicious circle of rising prices, rising taxes, and rising rates with the inevitable slump later on. Therefore, I trust that when the City of London has settled about this tax, we shall be able to get more consideration for the conditions that really matter to the people of the country.

6.48 p.m.

The Prime Minister (Mr. Chamberlain): In listening to this Debase—and I have heard most of it—I have derived the impression that it has been somewhat lopsided, inasmuch as something like 90 per


cent. of the speeches have been devoted to a subject which is only intended to provide a very small proportion of the revenue of the year. It is evident that the interest in that particular part of the Budget is out of all proportion to its productivity. Indeed the right hon. Gentleman the Member for South Hackney (Mr. H. Morrison) last night described the rest of the Budget as being dull and mediocre. I am not sure that it is not the finest compliment that he could pay to a Budget. When it is possible to raise, not £900,000,000 as the hon. Member who spoke last said, but £861,000,000 out of £863,000,000, by methods which can be characterised as "dull and mediocre" we can, at any rate, congratulate ourselves, if among all these things that have been rising and have been enumerated by the hon. Member for East Ham, South (Mr. Barnes), the revenue, too, has been rising so substantially that it has been possible to provide this enormous sum this year with an addition of only 3d. in the £ in the Income Tax. Of course, when the right hon. Gentleman describes the Budget as "dull and mediocre," what he really means is that it is one which it is extremely difficult for a Socialist to attack, seeing that all the new taxation is raised by direct taxes and not a penny has been put on in indirect taxation.
I propose to devote some part of my speech to that subject which has been talked of so much, but before I come to it, I think, if only in courtesy to hon. and right hon. Gentlemen opposite, I should devote some attention to some of the more general considerations which were put forward and which are embodied in their Amendment. I gathered from the speech of the right hon. Gentleman the Member for Keighley (Mr. Lees-Smith) this afternoon that what is really concerning him and his friends is a fear that presently there is going to be a reversal of the trade cycle which will coincide with the cessation of the armament programme and will also coincide with the presence of a Socialist Government in this House. Though that is very unlikely, I think that if it did occur it certainly might add considerably to their troubles, because I should imagine that the very fact of a Socialist Government coming into office would be sufficient to reverse the trade cycle. Nevertheless I can assure him that we are so far from taking that view ourselves that we are

considering the prospect on the assumption that there will be a National Government in office when the armament programme comes to an end, and even when the trade cycle begins to reverse its course.
I think prophecies about what is going to happen in the future must not be taken too literally. Above all, it would be unwise to assume that you can predict with any degree of certainty the wavelength of the trade cycle. All sorts of things are apt to turn up which have not been thought of beforehand, and the effect of which may completely upset what, in th,1 study, appears to be an unassailable academic theory. Let me say, however, that any Chancellor of the Exchequer who looks at all beyond the present year must have constantly in his mind the sort of considerations which were present to the minds of hon. and right hon. Gentlemen opposite, and that if and when the Government think that the time has come when some positive steps should he taken, either to restrict public works or in any other way to "iron out" the extreme point of the cycle, I am certain that my right hon. Friend the Chancellor of the Exchequer will be prepared to recommend those steps to the House.
A good deal of criticism was directed by right hon. Gentlemen opposite to the fact that we were borrowing at all. They have repeated over and over again with that ardour of conviction which possesses right hon. Gentlemen when it comes to orthodox finance, that they are distressed at the thought that this is what they call an unbalanced Budget. We had a considerable amount of discussion on the subject of borrowing when we were debating the Defence Loans Act. I do not think I should serve any useful purpose if I were now to take up the time of the House in repeating the arguments which I used on that occasion. I will only say, in regard to borrowing, that we are providing now out of revenue £198,000,000 for expenditure, whereas two years ago our expense on that head was only £124,000,000, so that we are now providing over £70,000,000 more out of revenue than we were providing two years ago. Moreover, we did discuss at considerable length the composition of the work which we were carrying through in connection with the armaments programme and it appeared from that discussion that very considerable parts of it


could, undoubtedly, be classified as capital expenditure. Therefore, at least, we are not open to the accusation that we are paying for current expenditure out of capital resources.
But when the Members of the Opposition keep on comparing what we are doing now with what the Socialist Government did in 1931 they are comparing two things which are quite unlike. That, it seems to me, only shows how completely they have failed to grasp the real mischief of what they did at that time. If you like to say that our Budget is unbalanced because we are including in it £80,000,000 for part of the expenditure upon armaments, I am not going to argue upon that point, because it is quite unimportant. The really important thing is what is the effect which it produces outside. Does it create a feeling of anxiety, of doubt, of uncertainty as to the future course of our finances. Does it affect our national credit? [An HON. MEMBER: "Yes, it has affected it already!"] I deny that, and I would point out that it cannot have that effect because our scheme is one which provides not only for a limit on the amount we are going to borrow, but also for the method of repayment and for a definite return to balanced Budgets after a period of time. The real trouble about the position under the Socialist Government was that there was no limit to their borrowing. They came from time to time sporadically and asked for fresh powers to increase borrowing, and there was no guarantee or assurance given to us that they would ever be able to stop. Further, there was no provision for repayment, and it was those two facts which really constituted the viciousness in the financial procedure which they followed.
Let me speak again on the question of the American debt. I am really surprised at the right hon. Gentleman, who ought to know better, bringing forward the American debt as though he thought that in that respect his Government had a better record than the National Government. Of course, it is not true to say that we have repudiated the American debt. When the right hon. Gentleman and his friends speak of the American debt they never speak of the debts and reparations that were owed to us. When my hon. Friend interrupted the right hon. Gentleman to remind him about the

Russian debt, the right hon. Gentleman professed total ignorance of the fact that the Russian Government had ever owed us anything. If he will look at page 6 of the Financial Statement he will see that the unfunded Russian debt to this country is £1,377,654,000. I do not think that all of us have yet forgotten that in the two years the Labour Government were in office they paid out, it is true, £46,500,000 to the United States, but they received in war debts and reparations £54,000,000, whereas the National Government have paid £32,250,000 to the United States, but they have received in payment of war debts and reparations to them not more than £800,000.
I come now to another subject on which there is confusion of thought opposite—the National Debt. I think that one of the right hon. Gentleman's accusations against us was that the National Debt, when we had added the £400,000,000 which it is proposed to borrow, would reach a higher level than it has ever reached before. That, of course, is perfectly true. The National Debt to-day is £7,797,000,000, against a peak figure of £7,829,000,000. When you acid to that £400,000,000, of course it will bring it up to over the peak. But the right hon. Gentleman must have forgotten that that figure includes the amount of the Exchange Equalisation Account, £350,000,000. He has perhaps also forgotten, or rather chosen to ignore, that if you are to measure the burden on the people you do not take the nominal amount of debt; you take the cost of interest and management. That is what we have to find every year, and it is in the amount of that figure that you find whether things are better, easier or more difficult. The peak figure 'was £328,000,000. It is now £211,000,000. It has come down to that extent. If you exclude the American Debt the Budget estimates now show a saving in 1937–38, in interest alone, of £60,000,000, compared with the actual expenditure in 1931–32.
It is quite untrue to say, as has been said again in the course of this Debate, that the whole of the increased taxation this year is being used for armaments and none of it for social services. Of course the cost of our social services is expanding every year and at a very rapid rate, and if we did not have that expansion it would not have been necessary


to raise Income Tax. I put together a number of social services, old age and widows' pensions, housing, health insurance, unemployment insurance and assistance and education. In 1925 the total cost of these social services was just over £100,000,000. In 1936 it was £212,000,000, more than double, and again it rose this year to £215,000,000. Already this year we have had fresh schemes of social service. What is the voluntary insurance scheme but social service? What is physical training but social service? What is the increase in the block grant to local authorities but social service? And the grants to the Special Areas may be classed under the same head. When the right hon. Gentleman last night told us that the whole purpose and object of this Budget was to protect the rich who were the friends of the Tories and to protect whom the Tories existed, he was talking political claptrap which he does not believe in and which hardly any of his followers believe in.
These were the principal points that were touched on in the speeches of the right hon. Gentleman opposite, with the exception of that part of the Budget which is known as Part III or N.D.C., to which also hon. and right hon. Gentlemen devoted some of their attention to-day and yesterday. It is perfectly true, as was said this afternoon by my right hon. Uncle—few nephews have had such an amount of good advice from their uncles as my right hon. Friend gave me this afternoon, expressed in such an entertaining manner; I will endeavour to treat this advice with the respect proper from a nephew to an uncle—it is quite true, as he said, that I could have balanced the Budget this year without imposing any N.D.C. at all. It is not correct to say that I created the deficit for the purpose of introducing the tax. As a matter of fact, as I think my right hon. Friend clearly perceived, the final result of the Budget was determined mainly by the amount which I chose to borrow this year, and if I had argued that it was right to borrow something less than the average of the five years for which I have power to borrow, the sum would have been a good deal less than £80,000,000 and instead of having a deficit of £2,000,000 I would have had one of even more.
My right hon. Friend criticises my making an allowance for Supplementary Estimates. That was a matter which was raised also in the Debate on the Budget Resolutions. I dealt with it at the time and pointed out that there were certain items for which Estimates had not been presented, but that I knew we were going to have Estimates presented for them in the course of the year, and I thought it was more honest to put down as nearly as I could what I thought was likely to be the expenditure on those items to which we were already pledged than to leave them out of account altogether. But while it is true that I could, by leaving out that allowance or otherwise manipulating the borrowing powers, have balanced the Budget without imposing the N.D.C., the House knows that I took a different view. I took the view that we were at the beginning of a period of exceptional expenditure which could not altogether be regarded year by year in isolation but which must be taken as a whole, and I further had in my mind something of what was referred to by the right hon. Gentleman the Member for Keighley this afternoon, the fact that as we get back to what we may call normal times we would still be left with the increased current expenditure on the Defence services, we would still have to think of returning to payment of a Sinking Fund, and we should still have to find the Sinking Fund and interest on the amount of the money we had borrowed.
Although I agree with what the right hon. Gentleman said on all these heads—and if anything, if I differ from him at all, it would be rather that he somewhat under-estimated the amount which we may hereafter have to find for these purposes—it may be that my right hon. Friend or whoever is at the Exchequer when this period does come to an end will be glad to think that there is still something which can be put on existing taxes, direct or indirect, for undoubtedly he will have to find a very much higher level of what will then become ordinary expenditure than what we are facing to-day. If we have financed a substantial part of the extra expenditure in the meantime from this new tax, T do not think that those who come after will look back on the proposition I have made in any very critical spirit.
Looking then, as I had to do, at the finances of the future as well as the


finances of the present, I sought for a new source of taxation, and it seemed to me that the natural thing, to use a phrase of the right hon. Gentleman the Member for North Cornwall (Sir F. Acland), was to go where the money was. Seeing—there is no question about it—that business generally is doing well, is making increasing profits, it seems to me that it was a fair and a right as well as a practicable course to ask them to make a special contribution for Defence. I have said on more than one occasion—I say it again now—that I do not associate myself with those who every time that profits are mentioned speak of them as though they were the same thing as profiteering. I do not take that view. I agree wih my right hon. Friend in saying that I see nothing wrong in making profits. People are not in business for their health. I see no reason why they should not make profits out of the work they do, any more than a workman who receives wages. You may abuse the position and, given favourable circumstances, that position has been abused in the past, notably during the Great War, although it was not always the fault of the manufacturer, for I remember an experience of my own when a contract was given to a firm with which I was connected. In consequence of it being repetition work to an extent which had never been done before, it proved to be far more profitable than the firm had ever anticipated that it would be. I sent the managing director up to the Ministry of Munitions at the time to ask them to reduce the price of the contract, but they refused.
It was not always the fault of the manufacturer, and I give that instance from my personal experience to show it. We tried to lower our prices, and we were asked to work out the contract and then offer a lower price next time. But we are not at war now. We are not exercising compulsory powers upon industry. We are inviting industry, as I think often against industry's own interests, to give priority to Government armaments work, and while we are inviting them to do that, we are at the same time taking every step that we can think of to prevent their making more than a moderate profit. As I have said before, you can control the people with whom you make your direct contracts,

but you cannot control, or we have not found the means of controlling, the subcontracts which the contractor makes with the people who supply him with some of his material, and in times like this, with rising prices and with favourable conditions, it is not only armament firms who make exceptional profits. Other people too may make exceptional profits, and it seems to me to be right and just, when we get exceptional expenditure, that we should ask those people to help to find it.
What struck me when I first made this proposal to the House was the general acceptance of the principle. Again and again hon. Members said, "We accept the principle, but we criticise the details, the method." That being so, it seemed to me that the right thing for me to do was to obtain, as early as I could, the information which I could not obtain before I made public the contents of the Budget, and then maintain the principle and make such alterations in detail as I could in order to meet the objections which had been raised. I carried out my pledge to the House, both in the letter and in the spirit. I received deputations, I saw individuals, I had arranged and classified a very large number of letters upon the subject, and when hon. Members or representatives of some of those who came to see me say that I turned a deaf ear to what they said, or that I paid no attention, I think that is hardly generous. The House can see for itself that the Finance Bill contains a number of very important concessions, which were made in order to meet the points that had been put before me, and it can measure the extent of the concessions by the fact that the yield has been so much reduced.
Let me, by the way, point out to my right hon. Friend, if I may, that he somewhat exaggerated the amount by which the yield had been reduced by these concessions, because, if you are going to take from the £15,000,000 £5,000,000 for a consequential loss of Income Tax, Surtax, etc., you must do the same by the original estimate of £20,000,000 to £25,000,000. The £20, 000, 000 to £25,000,000, dealing with Income Tax alone, would be reduced to £15,000,000 or £18,750,000 respectively, and that would compare with the £11,750,000 after allowing for Income Tax now. I


hoped that by the alterations which I made, which were directed towards those points of criticism which had been made, I could have proceeded with the proposals as they appear in the Finance Bill without too much opposition, but I must say that, listening to the speeches of hon. Members, I have not been able to detect any considerable amount of enthusiasm for the proposals as they stand to-day. It is a matter of the greatest regret to me that I happened to me out of the House on both occasions when a speech was made in support of them. One was by my right hon. and gallant Friend opposite, arid another one, which I have had the opportunity of reading, was the admirable speech of my hon. and learned Friend the Member for the West Derby Division (Mr. Maxwell Fyfe). He did not altogether omit criticism from his observations, but he did say—and I must say I agree with him—that in his opinion the picture which had been drawn of the results which were likely to follow the adoption of these proposals was greatly exaggerated.
I must say, frankly, that I think the business world has shown a certain amount of hysteria in criticising these proposals. When you think that as they are now the net yield is under £12,000,000 and that the profits of industry must be, I suppose, something between f600,000,000 and £700,000,000, it IS really rather difficult to accept the sort of picture which was painted for us last night by my hon. Friend the Member for East Aberdeen (Mr. Boothby), who spoke of the complete crushing of enterprise and the horror of the brunt of this frightful tax falling upon the youth of the country ready to branch out into new enterprises, I do not think that the complexities of the scheme would in practice turn out to be nearly so formidable as many people have represented. I feel satisfied that the effect of widening the step, the zone, from 6 to 12 per cent. would mean that a very large number of companies would never have had to have their capital computed at all, because it would be perfectly obvious that if their profits were under the 12 per cent., it would not, therefore, have been necessary to compute capital for the purpose of deciding what rate of charge should be made upon them.
All the same, I have to admit that there does appear to be genuine alarm

in the mind of industry generally and that the anxieties and doubts which they feel about the future of the tax have held up business to an extent which is very undesirable. My right lion. Friend has recognised that those who have so heartily approved the programme of rearmament could not now vote against the Second Reading of the Finance Bill. On the other hand, my hon. Friends have said that to he asked to vote for the Second Reading of a Bill embodying these proposals would be to put them in a position in which they ought not to be placed. I have to think not only of the position of hon. Members in this House, but I have also to think what would be the result if we did force the Bill through this House and we still found industry held up, still found industry making no progress because it felt uncertainty, still found a general feeling that the tax was unfair.
My right hon. Friend has endeavoured to make the way easy for me to withdraw these proposals, as he put it, by putting a number of most respectable precedents, including his own, but I do not think, looking back upon my own record, that I have ever been inclined to show a pig-headed obstinacy. Provided I could get what seemed to me to be the important thing, I have never boggled over particular ways of achieving it nor allowed anything in the way of amour propre to prevent my taking what I should call a common-sense attitude. In this particular case I am told that this tax is expected to give a great deal of trouble, to cost a great deal of money in investigation, to distract people from attending to the ordinary routine of their business in order to see that calculations were properly made, and that, when all is said and done, it is going to produce a sum which is very much less than that which I originally estimated for. On the other hand, I am told that industry wishes it to be understood that it does not challenge the propriety of its finding the amount that I want out of its profits.
Well, Sir, it seems to me that I should not only be something less than prudent, but that I should be stupid, if I were to persist in a particular method of getting what I want, which already is not going to get me what I want, if I can get it by a simpler method, and get it in larger amounts and in a much better way. The hon. Member for Bishop Auckland (Mr.


Dalton), in the course of his speech, introduced a slogan and said, "Let us have a simpler tax with a larger yield." I think perhaps it would be a good thing to adopt that suggestion. That is what, after consultation with my right hon. Friend, the Chancellor has proposed to do.

Mr. Gallacher: You have thrown me over.

The Prime Minister: I thought that the hon. Gentleman had some secret method of getting the money which he was thinking, under certain conditions, of imparting to me. I hope he will not go back on that. I will give the House this information then, that my right hon. Friend proposes when we get to Part III in Committee, not to move the inclusion of the Clauses in that Part, or of the Schedules which are associated with them. In the meantime, he will proceed to work out other proposals on the assumption that those proposals will be devoted to finding a simpler tax upon the profits of industry and a tax which is estimated to produce not less than £25,000,000.

Colonel Wedgwood: Will it be a tax on the profits of all industries, or on profiteering industry only?

The Prime Minister: If the right hon. and gallant Gentleman is asking whether it will be a tax on industries that do not make profit, I do not propose to include them.

Colonel Wedgwood: We ought to have this quite clear. Does the right hon. Gentleman now intend to include in the tax all those industries which would not have been taxed under the old form of the tax?

The Prime Minister: It is not for me to anticipate what the proposals of my

right hon. Friend will be. When they are tabled the right hon. and gallant Gentleman will see whether they are agreeable to him. This change will require new Financial Resolutions before the proposals can be embodied in the Bill. Therefore, the first intimation which the House will have of the nature of the new proposals will be when my right hon. Friend tables the Financial Resolutions, which he will move on the earliest possible occasion. I have stated what are the conditions which, in my opinion, are necessary for any new tax of this kind. The new prosposals will not involve any increase of Income Tax or of indirect taxation. They will still be based on the principle which is generally agreed in the House, namely, a tax on the profits of industry. They are to be made as simple as may be to avoid the difficulties which have been mentioned, and they are to produce the requisite amount of money. In that way, we have, at any rate, met the general desire of the majority of the House.

7.34 P.m.

Mr. Attlee: I do not desire to detain the House, but we ought to recognise that the Prime Minister has met the opinion of the House. We are here in a democratic assembly and it is just as well that we should record that we have a Government which is responsive to the will of the House. I should like to thank the Prime Minister for adopting the proposal made from this side of the House that he should abandon this ill-advised experiment and raise a larger sum by a better method.

Question put, "That the words proposed to be left out stand part of the Question."

The House divided: Ayes 340; Noes, 149.

Division No. 199.]
AYES.
[7.35 p.m.


Acland-Troyte, Lt.-Col. G. J.
Baldwin-Webb, Col. J.
Bossom, A. C.


Adams, S. V. T. (Leeds, W.)
Balfour, G. (Hampstead)
Boulton, W. W.


Agnew, Lieut.-Comdr. P. G.
Balfour, Capt. H. H. (Isle of Thanet)
Bower, Comdr. R. T.


Albery, Sir Irving
Balniel, Lord
Boyce, H. Leslie


Alexander, Brig.-Gen. Sir W.
Barclay-Harvey, Sir C. M.
Bracken, B.


Allen, Col. J. Sandeman (B'knhead)
Baxter, A. Beverley
Brass, Sir W.


Amery, Rt. Hon. L. C. M. S.
Beamish, Rear-Admiral T. P. H.
Briscoe, Capt. R. G.


Anderson, sir A. Garrett (C. of Ldn.)
Beaumont, M. W. (Aylesbury)
Brocklebank, Sir Edmund


Anstruther-Gray, W. J.
Beaumont, Hon. R. E. B. (Portsm'h)
Brown, Col. D. C. (Hexham)


Apsley, Lord
Beit, Sir A. L.
Brown, Rt. Hon. E. (Leith)


Aske, Sir R. W.
Bennett, Sir E. N.
Brown, Brig.-Gen. H. C. (Newbury)


Assheton, R.
Bernays, R. H.
Bull, B. B.


Astor, Major Hon. J. J. (Dover)
Birchall, Sir J. D.
Bullock, Capt. M.


Astor, Viscountess (Plymouth, Sutton)
Bird, Sir R. B.
Burgin, Rt. Hon. Dr. E. L.


Astor, Hon. W. W. (Fulham, E.)
Blair, Sir R.
Burton, Col. H. W.


Atholl, Duchess of
Blaker, Sir R.
Butler, R. A.


Baillie, Sir A. W. M.
Boothby, R. J. G.
Campbell, Sir E. T.




Cartland, J. R. H.
Hamilton, Sir G. C.
Moreing, A. C.


Carver, Major W. H.
Hanbury, Sir C.
Morgan, R. H.


Cary, R. A.
Hannah, I. C.
Morris, O. T. (Cardiff, E.)


Castlereagh, Viscount
Hannon, Sir P. J. H.
Morrison, G. A. (Scottish Univ's.)


Cayzer, Sir C. W. (City of Chester)
Harbord, A.
Morrison, Rt. Hon. W. S. (Cirencester)


Cayzer, Sir H. R. (Portsmouth, S.)
Harvey, Sir G.
Muirhead, Lt.-Col. A. J.


Cazalet, Thelma (Islington, E.)
Haslam, H. C. (Horncastle)
Munro, P.


Cazalet, Capt. V. A. (Chippenham)
Haslam, Sir J. (Bolton)
Nall, Sir J.


Chamberlain, Rt. Hn. N. (Edgb't'n)
Heilgers, Captain F. F. A.
Neven-Spence, Major B. H. H.


Channon, H.
Heneage, Lieut.-Colonel A. P.
Nicholson, G. (Farnham)


Chapman, Sir S. (Edinburgh, S.)
Hepburn, P. G. T. Buchan
O'Connor, Sir Terence J.


Chorlton, A. E. L.
Hepworth, J.
O'Neill, Rt. Hon. Sir Hugh


Christie, J. A.
Herbert, A. P. (Oxford U.)
Ormsby-Gore, Rt. Hon. W. G. A.


Churchill, Rt. Hon. Winston S.
Herbert, Major J. A. (Monmouth)
Orr-Ewing, I. L.


Clarke, F. E. (Dartford)
Herbert, Capt. Sir S. (Abbey)
Palmer, G. E. H.


Clarke, Lt.-Col. R. S. (E. Grinstead)
Higgs, W. F.
Patrick, C. M.


Clarry, Sir Reginald
Hills, Major Rt. Hon. J. W. (Ripon)
Peake, O.


Cobb, Captain E. C. (Preston)
Hoare, Rt. Hon. Sir S.
Peat, C. U.


Colfox, Major W. P.
Holmes, J. S.
Percy, Rt. Hon. Lord E.


Colman, N. C. D.
Hope, Captain Hon. A. O. J.
Perkins, W. R. D.


Colville, Lt.-Col. Rt. Hon. D. J.
Hopkinson, A.
Peters, Dr. S. J.


Cooke, J. D. (Hammersmith, S.)
Hore-Belisha, Rt. Hon. L.
Petherick, M.


Cooper, Rt. Hn. T. M. (E'nburgh, W.)
Horsbrugh, Florence
Pickthorn, K. W. M.


Courthope, Col. Rt. Hon, Sir G. L.
Howitt, Dr. A. B.
Pilkington, R.


Cox, H. B. T.
Hudson, Capt. A. U. M. (Hack., N.)
Plugge, Capt. L. F.


Cranborne, Viscount
Hudson, R. S. (Southport)
Ponsonby, Col. C. E.


Croft, Brig.-Gen. Sir H. Page
Hulbert, N. J.
Power, Sir J. C.


Crooke, J. S.
Hume, Sir G. H.
Pownall, Lt.-Col. Sir Assheton


Crookshank, Capt. H. F. C.
Hunter, T.
Radford, E. A.


Croom-Johnson, R. P.
Hurd, Sir P. A.
Raikes, H. V. A. M.


Cross, R. H.
James, Wing-commander A. W. H.
Ramsay, Captain A. H. M.


Crossley, A. C.
Jarvis, Sir J. J.
Ramsbotham, H.


Crowder, J. F. E.
Joel, D. J. B.
Ramsden, Sir E.


Cruddas, Col. B.
Jones, Sir G. W. H. (S'k N'w'gt'n)
Rankin, Sir R.


Culverwell, C. T.
Jones, L. (Swansea W.)
Rathbone, J. R. (Bodmin)


Davies, C. (Montgomery)
Keeling, E. H.
Rayner, Major R. H.


Davies, Major Sir G. F. (Yeovil)
Kerr, Colonel C. I. (Montrose)
Reed, A. C. (Exeter)


Davison, Sir W. H.
Kerr, J. Graham (Scottish Univs.)
Reid, Sir D. D. (Down)


De Chair, S. S.
Keyes, Admiral of the Fleet Sir R.
Reid, W. Allan (Derby)


Denman, Hon. R. D.
Kimball, L.
Remer, J. R.


Despencer-Robertson, Major J. A. F.
Knox, Major-General Sir A. W. F.
Ropner, Colonel L.


Dodd, J. S.
Lamb, Sir J. Q.
Ross, Major Sir R. D. (Londonderry)


Doland, G. F.
Lambert, Rt. Hon. G.
Ross Taylor, W. (Woodbridge)


Donner, P. W,
Latham, Sir P.
Rowlands, G.


Dorman-Smith, Major Sir R. H.
Law, Sir A. J. (High Peak)
Russell, Sir Alexander


Duckworth, Arthur (Shrewsbury)
Leckie, J. A.
Russell, R. J. (Eddisbury)


Duggan, H. J.
Lees-Jones, J.
Russell, S. H. M. (Darwen)


Dunglass, Lord
Leigh, Sir J.
Salmon, Sir I.


Eastwood, J. F.
Leighton, Major B. E. P.
Samuel, M. R. A.


Eckersley, P. T.
Lennox-Boyd, A. T. L.
Sandeman, Sir N. S.


Eden, Rt. Hon. A.
Levy, T.
Sanderson, Sir F. B.


Edmondson, Major Sir J.
Lewis, O.
Sandys, E. D.


Elliot, Rt. Hon. W. E.
Liddall, W. S.
Sassoon, Rt. Hon. Sir P.


Ellis, Sir G.
Lindsay, K. M.
Savery, Sir Servington


Elliston, Capt. G. S.
Little, Sir E. Graham
Selley, H. R.


Elmley, Viscount
Llewellin, Lieut.-Col. J. J.
Shakespeare, G. H


Emery, J. F.
Lloyd, G. W.
Shaw, Major P. S. (Wavertree)


Emmott, C. E. G. C.
Loftus, P. C.
Shaw, Captain W. T. (Forfar)


Errington, E.
Lovat-Fraser, J. A.
Shepperson, Sir E. W.


Erskine-Hill, A. G.
Lyons, A. M.
Shute, Colonel Sir J. J.


Evans, Capt. A. (Cardiff, S.)
Mabane, W. (Huddersfield)
Simmonds, O. E.


Fildes, Sir H.
MacAndrew, Colonel Sir C. G.
Simon, Rt. Hon. Sir J. A.


Findlay, Sir E.
M'Connell, Sir J.
Smiles, Lieut.-Colonel Sir W. D.


Fox, Sir G. W. G.
McCorquodale, M. S.
Smith, Bracewell (Dulwich)


Fremantle, Sir F. E.
MacDonald, Rt. Hon. J. R. (Scot. U.)
Smith, L. W. (Hallam)


Furness, S. N.
MacDonald, Rt. Hon. M. (Ross)
Smith, Sir R. W. (Aberdeen)


Fyfe, D. P. M.
Macdonald, Capt. P. (Isle of Wight)
Somerset, T.


Ganzoni, Sir J.
McEwen, Capt. J. H. F.
Somervell, Sir D. B. (Crewe)


Gilmour, Lt.-Col. Rt. Hon. Sir J.
McKie, J. H.
Somerville, A. A. (Windsor)


Gledhill, G.
Maclay, Hon. J. P.
Southby, Commander Sir A. R. J.


Gluckstein, L. H.
Macmillan, H. (Stockton-on-Tees)
Spears, Brigadier-General E. L.


Glyn, Major Sir R. G. C.
Magnay, T.
Spens, W. P.


Goodman, Col. A. W.
Maitland, A.
Stanley, Rt. Hon. Oliver (W'm'l'd)


Gower, Sir R. V.
Makins, Brig.-Gen. E
Stewart, J. Henderson (Fife, E.)


Graham, Captain A. C. (Wirral)
Manningham-Buller, Sir M.
Storey, S.


Granville, E. L.
Margesson, Capt. Rt. Hon. H. D. R.
Stourton, Major Hon. J. J.


Gretton, Col. Rt. Hon. J.
Markham, S. F.
Strauss, E. A. (Southwark, N.)


Gridley, Sir A. B.
Mason, Lt.-Col. Hon. G. K. M.
Strauss, H. G. (Norwich)


Grigg, Sir E. W. M.
Mayhew, Lt.-Col. J.
Strickland, Captain W. F.


Grimston, R. V.
Mellor, Sir J. S. P. (Tamworth)
Stuart, Lord C. Crichton (N'thw'h)


Gritten, W. G. Howard
Mills, Sir F. (Leyton, E.)
Sutcliffe, H.


Guest, Maj. Hon. O. (C'mb'rw'll, N.W.)
Mills, Major J. D. (New Forest)
Tasker, Sir R. I.


Guinness, T. L. E. B.
Mitchell, Sir W. Lane (Streatham)
Tate, Mavis C.


Gunston, Capt. D. W.
Moore, Lieut.-Col. Sir T. C. R.
Taylor, C. S. (Eastbourne)


Guy, J. C. M.
Moore-Brabazon, Lt.-Col. J. T. C.
Taylor, Vice-Adm. E. A. (Padd., S.)


Hacking, Rt. Hon. D. H.









Thomas, J. P. L.
Ward, Irene M. B. (Wallsend)
Windsor-Clive, Lieut.-Colonel G.


Thomson, Sir J. D. W.
Wardlaw-Milne, Sir J. S.
Winterton, Rt. Hon. Earl


Titchfield, Marquess of
Warrender, Sir V.
Withers, Sir J. J.


Touche, G. C.
Waterhouse, Captain C.
Womersley, Sir W. J.


Train, Sir J.
Wayland, Sir W. A.
Wood, Hon. C. I. C.


Tree, A. R. L. F.
Wedderburn, H. J. S.
Wood, Rt. Hon. Sir Kingsley


Tryon, Major Rt. Hon. G. C.
Wells, S. R.
Wragg, H.


Turton, R. H.
Wickham, Lt.-Col. E. T. R.
Wright, Squadron-Loader J. A. C.


Wakefield, W. W.
Williams, C. (Torquay)
Young, A. S. L. (Partick)


Walker-Smith, Sir J.
Williams, H. G. (Croydon, S.)



Wallace, Capt. Rt. Hon. Euan
Willoughby de Eresby, Lord
TELLERS FOR THE AYES.—


Ward, Lieut.-Col. Sir A. L, (Hull)
Wilson, Lt.-Col. Sir A. T. (Hitchin)
Mr. James Stuart and Captain




Dugdale.




NOES.


Acland, Rt. Hon. Sir F. Dyke
Griffiths, J. (Llanelly)
Pethick-Lawrence, Rt. Hon. F. W.


Acland, R. T. D. (Barnstaple)
Groves, T. E.
Potts, J.


Adams, D. (Consett)
Hall, G. H. (Aberdare)
Price, M. P.


Adams, D. M. (Poplar, S.)
Hall, J. H. (Whitechapel)
Pritt, D. N.


Adamson, W. M.
Harris, Sir P. A.
Quibell, D. J. K.


Alexander, Rt. Hon. A. V. (H'lsbr.)
Harvey, T. E. (Eng. Univ's.)
Richards, R. (Wrexham)


Ammon, C. G.
Henderson, A. (Kingswinford)
Ridley, G.


Anderson, F. (Whitehaven)
Henderson, J. (Ardwick)
Ritson, J.


Attlee, Rt. Hon. C. R.
Henderson, T. (Tradeston)
Roberts, W. (Cumberland, N.)


Banfield, J. W.
Hills, A. (Pontefract)
Rowson, G.


Barnes, A. J.
Hopkin, D.
Salter, Dr. A. (Bermondsey)


Batey, J.
Jenkins, A. (Pontypool)
Sanders, W. S.


Bellenger, F. J.
Jenkins, Sir W. (Neath)
Seely, Sir H. M.


Benn, Rt. Hon. W. W.
Jones, A. C. (Shipley)
Sexton, T. M.


Broad, F. A.
Jones, Sir H. Haydn (Merioneth)
Shinwell, E.


Bromfield, W.
Jones, J. J. (Silvertown)
Short, A.


Brown, C. (Mansfield)
Jones, Morgan (Caerphilly)
Silkin, L.


Brown, Rt. Hon. J. (S. Ayrshire)
Kelly, W. T.
Silverman, S. S.


Buchanan, G.
Kennedy, Rt. Hon. T.
Simpson, F. B.


Burke, W. A.
Kirby, B. V.
Sinclair, Rt. Hon. Sir A. (C'thn's)


Cape, T.
Kirkwood, D.
Smith, E. (Stoke)


Chater, D.
Lansbury, Rt. Hon. G.
Smith, Rt. Hon. H. B. Lees (K'ly)


Cluse, W. S.
Lawson, J. J.
Smith, T. (Normanton)


Clynes, Rt. Hon. J. R.
Leach, W.
Sorensen, R. W.


Cocks, F. S.
Lee, F.
Stephen, C.


Cove, W. G.
Leonard, W.
Stewart, W. J. (H'ght'n-le-Sp'ng)


Cripps, Hon. Sir Stafford
Leslie, J. R.
Strauss, G. R. (Lambeth, N.)


Daggar, G.
Logan, D. G.
Taylor, R. J. (Morpeth)


Dalton, H.
Lunn, W.
Thorne, W.


Davies, R. J. (Westhoughton)
Macdonald, G. (Ince)
Thurtle, E.


Davies, S. O. (Merthyr)
McEntee, V. La T.
Tinker, J. J.


Day, H.
McGhee, H. G.
Viant, S. P.


Dobbie, W.
MacLaren, A.
Walker, J.


Dunn, E. (Rother Valley)
Maclean, N.
Watkins, F. C.


Ede, J. C.
MacNeill, Weir, L.
Watson, W. McL.


Edwards, Sir C. (Bedwellty)
Mander, G. le M.
Wedgwood, Rt. Hon. J. C.


Evans, D. O. (Cardigan)
Marshall, F.
Welsh, J. C.


Evans, E. (Univ. of Wales)
Maxton, J.
Westwood, J.


Fletcher, Lt.-Comdr. R. T. H.
Messer, F.
White, H. Graham


Foot, D. M.
Milner, Major J.
Whiteley, W.


Frankel, D.
Montague, F.
Williams, D. (Swansea, E.)


Gallacher, W.
Morrison, Rt. Hon. H. (Hackney, S.)
Williams, E. J. (Ogmore)


Gardner, B. W.
Morrison, R. C. (Tottenham, N.)
Williams, T. (Don Valley)


George, Major G. Lloyd (Pembroke)
Muff, G.
Wilson, C. H. (Attercliffe)


Gibbins, J.
Nathan, Colonel H. L.
Windsor, W. (Hull, C.)


Gibson, R. (Greenock)
Naylor, T. E.
Woods, G. S. (Finsbury)


Graham, D. M. (Hamilton)
Noel-Baker, P. J.
Young, Sir R. (Newton)


Greenwood, Rt. Hon. A.
Oliver, G. H.



Granfell, D. R.
Owen, Major G.
TELLERS FOR THE NOES.—


Griffith, F. Kingsley (M'ddl'sbro, W.)
Paling, W.
Mr. Mathers and Mr. Charleton.


Griffiths, G. A. (Hemsworth)
Parkinson, J. A.



Bill read a Second time, and committed to a Committee of the Whole House for Thursday.

Orders of the Day — FINANCE [EXPENSES OF DIRECTORS OF MUSEUMS AND GALLERIES].

Considered in Committee under Standing Order No. 69.

[Captain BOURNE in the Chair.]

Resolved,
That, for the purpose of any Act of the present Session relating is finance, it is expedient to authorise the payment out of moneys provided by Parliament of any expenses incurred by the director of any museum or gallery, the expenses of which are defrayed out of moneys provided by Parliament, in connection with the exemption of sculptures and other works of art from customs duties." (King's Recommendation signified.)—[Lieut.-Colonel Colville.]

Resolution to be reported upon Thursday.

Orders of the Day — CIVIL LIST BILL.

Order for Third Reading read.

Motion made, and Question proposed, "That the Bill be now read the Third time."

7.49 P.m.

Mr. Morgan Jones: I beg to move to leave out the word "now," and, at the end of the Question, to add the words "upon this day three months."
At each succeeding stage of the discussions upon this Bill those associated with me on this side of the House have availed themselves of the opportunity to state the point of view which this party entertain regarding the proposals of this Bill, and we are unwilling to allow it to pass its Third Reading without once more indicating our point of view. It will be appreciated that opportunities for the discussion of the Civil List are very unfrequent, because it is fixed at the beginning of the lifetime of the Monareh qua Monareh and is not again discussed while he reigns. Therefore, the provisions of the Bill should be examined with meticulous care. It has already been stated and reiterated by hon. Members on this side that our action in this matter does not arise from hostility to the King as a person nor to his office as Monarch. We are impelled to offer criticisms on other grounds. As to the personal side of the matter, I imagine that I carry everyone on this side with me when I say that we should desire that the King and his family should lead their lives in their own way, enjoying as much privacy as may be possible to them, and rejoicing in whatever friendships they may desire to cultivate. In other words, we should desire them to live normal and happy lives, free from the glare of publicity in so far as that may be consistent with their manifold public duties, but in the very nature of the case their lives cannot be lived entirely apart from the people over whom they rule. Indeed, I would say that the very conditions of the age in which we live must compel them to suffer in some degree intrusions upon their private lives.
It is in regard to the other aspect of the question, the more public aspect of it, that there still seems to be some failure to understand the position taken up by His Majesty's Opposition. It will be conceded, I think, that the very presence of this party in the House is symptomatic

of the change which has come over the minds of the people of this country in relation to public affairs. Time was when political power alternated between two great parties in the State, and I think it will not be controverted that they represented, broadly, the landowning and the commercial interests. They sometimes fought each other with great bitterness, but, whatever happened, they were always well represented in the social circle which surrounded the Throne. No barriers of wealth could exclude there, and socially they had unchallenged access to the Royal circle. But, in spite of that fact, it was the custom in those days when one Government succeeded another of a different political complexion that all the principal officers of the Royal Household changed too.
A very big change came over that position round about 1924, when a Labour Government first took office in this country. Only a few of those offices were actually filled directly by nomination by the Prime Minister. He agreed that several should be filled by the direct nomination of the occupant of the Throne. That produced a very big change. It might have been a right move, or it might have been a wrong one, but it meant that appointments to those posts which used to be nominated by an incoming Prime Minister passed finally, I think, to the nomination of the Monarch himself. Therefore, it reduced the number of directly-appointed representatives of the Government of the day in the Royal Household. That was an important consequence. It made no difference to the Conservative party or the Liberal party, because their supporters still had access to the Royal circle on social grounds. But the position is not so easy in connection with an Opposition such as ours, and therefore, the standard which may be erected as qualifying people to enter into the Royal circle, so to speak, is a standard which is of first-rate importance to Governments for the future.
I hope that I shall be forgiven if I say that hon. Gentlemen opposite overlook the merits of the claim which we make for simplification of the arrangements pertaining to Royalty. The more lavish, the more luxurious the standard imposed upon Royalty the farther does it become removed.from less affluent people, the greater is the gulf fixed between those who


represent poor people and who are themselves poor and those, on the other hand, who enjoy great affluence and wealth. So my first point is that the case for simplification is a case for making easier the access of the less affluent members of the community to the Monarch. That case rests upon simplification, and simplification to a very considerable degree. It cannot be doubted that as things are the Monarch of the day is enclosed, so to speak, by an almost impenetrable circle of wealthy individuals, and the more we adhere to the habit of insisting upon expensive Court costumes, expensive uniforms and costly entertainments the more impossible do we make it for poorer people to have access to the Royal person. I am not sure that that point is amply seized by people who have sought to repel the proposition which we have tried to lay down in the course of these discussions. If that be true, is it not obvious, as long as it remains true, that we are making it impossible for the Monarchy in modern times to discharge its function as most people would desire it to be discharged?
I do not know whether this observation will be resented, but I hope not, as I venture to submit it respectfully and in no sense as a reflection upon any occupant of the Throne either present or past. After all, the occupant of the Throne must, of necessity, be possessed of experiences which are limited in character, so far as the lives of the workers are concerned. I cordially admit that occupants of the Throne have done their best to make themselves acquainted with that life, but of necessity they cannot know it at first hand. Consequently they suffer under a very serious handicap in interpreting the impulses and the ideas which govern a movement such as ours. To put it frankly, I wonder, if I made an examination among all my Friends on this side of the House, how many of them have, in the course of their lives, had access to, or opportunity to discuss at any length any public problems with, a member of the Royal circle. I expect that the aggregate time would scarcely amount, among us all, to 24 hours, or to 48 hours at the most. That is an unfair handicap to impose upon the occupant of the Throne. In a speech outside this House, the right hon. Gentleman the Member for Epping (Mr. Churchill) claimed that the

Conservative party represented the overwhelming majority of the electorate of this country. I do not know, but I rather question it. We can say that, in the period of our greatest political depression in recent years, 1931, we represented nearly 7,500,000 people. It is therefore important that the occupant of the Throne, at any given moment, should be acquainted with the ideas which dominate the minds of the working classes.
What opportunity can there be, if this elaborate ceremonial is insisted upon and this excessive ritual is retained, for the ideas which dominate our minds to be interpreted fairly and properly to the occupant of the Throne? Let me, by way of example and not in order to raise a controversy, take the year 1931, when, as all hon. Members know, this party occupied the position of political authority in the country. There was a crisis in August. Those who led our party differed from us—three of them at least. I wonder what opportunity was available to enable the occupant of the Throne in those days to know the reasons which guided those of our Friends who refused to he associated with those who went with the Conservative party and the Liberal party in those days. It is important that the King, at any moment, should be enabled to know, not the mind of one side or one social circle, but the mind of all social circles, whatsoever political allegiances they may entertain. Therefore, this matter is closely related to the question of the simplification of the arrangements that appertain to our Monarchy. The more elaborate they are and the more expensive and ritualistic, the more remote they are from the ordinary man and woman in the street.
For good or for ill, this party is the alternative government of the country. Who knows when it may be called upon to accept office? I believe, as the right hon. Gentleman the Member for Epping said the other day, that while we are in office we have, properly preserved to us, our due opportunity to present our political case to the occupant of the Throne, but, outside this political advice or access, there remains also a social circle, which is exclusive in character, and is bound to be so by reason of the standards of arrogant luxury to which they must rise in order to become part


and parcel of that circle. I hope hon. Members will forgive me for putting it bluntly, but I do not do it with any acrimony whatever. It is important, if we are to retain the Monarchy in a democratic age like this, that it shall not be a remote thing, but something that can interpret as accurately as possible the mind, heart, will and aspirations of all sections of the community.
We thus reiterate our claim, on this the last opportunity afforded to us before this Civil List Bill is finally endorsed by this House, for the simplification of the arrangements referred to in the Civil List. Whether our plea is accepted or not—I doubt not that it will not be accepted on this occasion—I am persuaded that the statement embodied on behalf of us all by our representatives on the Civil List Committee, though rejected to-day, will remain a document of great political significance in the future, as indicating, in language of studied moderation, the view of this party in relation to the Monarchy and the arrangements that appertain to it. I hope that I have stated in unexaggerated language the point of view which we entertain. I wish hon. Gentlemen opposite would make a more strenuous effort to understand it than they seem to have made, but whether they understand it or not, we have laid down formally, but I hope courteously, the point of view that we retain. Having stated it briefly once more, I move the Amendment.

8.14 p.m.

Mr. Stephen: Before the House passes the Third Reading of this Bill I desire to say a few words in support of the Amendment. On the Bill which was before us just now, the Government made a concession to the Opposition, but I do not think we can be very hopeful of any concession on this Bill from the Government Front Bench. It is only right to say, as representing hon. Members on this bench, our agreement with the line that has been taken by hon. Gentlemen above the Gangway, when the Financial Resolution was before the Committee and when we did not move several Amendments which we had upon the Paper. The speech made by the Leader of the Opposition and the Motion moved by him on that occasion appeared to provide us with an opportunity for stating our view upon the Civil List.
I do not propose to discuss those Amendments now, but one question was raised as to whether they would carry out our purpose. What we had in view was that far too much is being spent upon the maintenance of the Monarchy. We had an opportunity previously in this House of presenting a Motion which would have had the effect of replacing the monarchical system altogether, but that question is not before us now. If the Monarchy is to be retained, the expenditure is far too great, and is out of proportion to what it ought to be.
I would also draw attention to that part of the Bill which deals with the provision for people who have deserved well of the State, or for their dependants, or for men and women who are eminent in art and science and literature but who, in spite of their eminence, are in needy circumstances, or for the dependants of such people. I would contrast the pitiful figure of £2,500 for the maintenance of all the people who may become entitled to a Civil List pension with the vast sum that is provided for the maintenance of the members of the Royal House—for one little girl £6,000 at present, and an additional £9,000 when she becomes 21 years of age, while all these other people who have contributed great services to the community are put off with the miserable allowances that can be got out of £2,500 a year. I cannot see anything at all reasonable in the disparity between those two figures.
There are other things in connection with the Civil List that interest me. There is, for example, the provision that is made for the widow of the Monarch should the Monarch die, namely, £70,000—a greater provision for the widow than is made for her when she is Queen along with her Consort. Evidently the principle is that the widow in that case should get an increase, but in the ordinary pension scheme in the country the widow gets a much smaller income when she loses her husband. There seem to be ever so many inconsistencies in connection with the provisions that are made.
I also want to say again that I do not think it is at all in accordance with democracy to maintain all those great palaces as the home of the Sovereign of the country. In one of our Amendments we proposed that these palaces should be transformed into convalescent homes,


that the necessary moneys should be provided for that purpose, and that the Monarch should get a much smaller allowance and be allowed to live in a way that would bring him into much closer association with his fellow human beings in the country. The House so far has refused to make any concession to the point of view of the Opposition here, but I believe that the opposition to the present Civil List is the beginning of a movement which will ultimately meet with victory in this country. I welcome it as such. I am very glad indeed that hon. Members above the Gangway have pressed before the House the unfair position which the Labour Opposition occupies in this respect, and I also welcome the way in which they have claimed that we should have a Monarchy in connection with which the extravagances and the great expenditure should be wiped out, and that the maintenance of the Monarchy should be put upon a scale that will make it reasonable for the days in which we live. I, certainly, with my colleagues, shall have very great pleasure in going into the Lobby in support of the Opposition Amendment, and I believe that the present opposition will be the beginning of great changes in this country in the days to come.

8.20 p.m.

Mr. Markham: We have just listened to two speeches made with great restraint from the opposite side of the House, and I am sure that many Members in all parts of the House will agree with some of what has been said; but I think that the case is a little unfairly put when the point is raised about the Monarchy costing £410,000 a year, and it is assumed that, if the Monarchy were abolished, that sum would be saved. [HON. MEMBERS: "No! "] It was implicit in the speech of the hon. Member for Camlachie (Mr. Stephen) that a great deal of the cost of the Monarchy would be saved if the Monarchy were abolished, and, although "Noes" may have come from other parts of the House, hon. Members here are nodding assent, and we must allow those hon. Members to interpret their own words. It is assumed that, if this country were converted into a republic, money would be saved by doing so, but that is not the case. No republic can be quoted anywhere in the world that is more

economically run as regards the formal part than the British Monarchy. Let me say here that I speak with a somewhat detailed knowledge of the subject, because it was my privilege to assist the late Sir Sidney Lee in two of his official biographies of the Monarchs of this country, and that point comes out very strongly in some papers yet to be published. But, of the Civil List of £410,000 a year, as it is now, approximately one-half goes in wages, that would have to be paid under any form of government that could be devised. It is necessary to have the ordinary formalities of courtesy, whether you have a republic or a monarchy. Far more money is spent in Nazi Germany and Republican France—

Mr. Buchanan: On a point of Order. I am wondering whether it is in order to discuss the issue of republicanism now. I hope it is, because it happens to suit me.

Mr. Deputy-Speaker (Sir Dennis Herbert): Certainly it would not be in order, but I do not think that at present what the hon. Member for South Nottingham (Mr. Markham) has said has gone so far as discussing that issue. As long as he confines himself to a mere comparison of figures, I cannot very well stop him.

Mr. Buchanan: The hon. Member was saying that he believes that a republic is more expensive now than a monarchy, and I would suggest that: it would be as well if you would make clear the exact limitations of the discussion.

Mr. Deputy-Speaker: I had better make them clear by stopping any hon. Members when I think they have gone too far.

Mr. Buchanan: I hope I shall not be the first.

Mr. Markham: I think that perhaps, in order to be on the safe side, I had better address my remaining remarks to the question of simplification, which was raised by the hon. Member for Caerphilly (Mr. Morgan Jones). I do riot think it is sufficiently realised how large an amount of simplification has gone on during the last half-century at the British Court. Those who are older than I am may, perhaps, remember the tremendous formality and very great seclusion of Queen Victoria. That passed, I hope for ever, under the late King George.
One could, perhaps, give definite examples of the way in which simplification is growing. There is the question, for example, of Court dress. In Queen Victoria's day there were the most stringent regulations as to dress at Royal garden parties and so on. Now-a-days it is possible to go, as I have gone, to a Royal garden party in an ordinary lounge suit. When I go to a garden party in a lounge suit, the people in top hats are hon. Members opposite. [Interruption.] That is perfectly true. When it comes to a Court Ball, there has been a considerable relaxation of the dress regulations, and it is now possible to go in what is called alternative dress, which is the ordinary evening upper part and something else down below. I do not think anyone would be turned away who went in ordinary evening dress. The most spectacular uniform seen at a recent Court Ball was one worn by one of the most outspoken of hon. Members opposite. There has been this very great simplification in the last half centry. The old frock coat has gone for ever and one sees a much more democratic style of dress at many Court functions. But I agree with the hon. Member for Caerphilly that still more simplification—more easiness is desirable, I am not connected in any way with the theatrical profession—perhaps I missed my vocation in some respects—but I had occasion to make inquiries of some firms of theatrical costumiers and I understand that they did far more business at the Coronation than they have done for years in letting out suits and uniforms of all sorts, shapes and sizes to those who attended the Coronation function. That, to me, is something almost verging on dishonesty. If a man is good enough to be invited to the Coronation, surely he is good enough to go in the clothes that he habitually wears.
I agree with the hon. Member for Caerphilly in another respect. One would like to see far less of the pseudo-military pomp which attends some of these Court ceremonials, and get down a little more to the Sunday attire of most of the people of these Islands. For a good many of the activities of Their Majesties they are accompanied by rather large bodies of troops. The reason for that is that in the old days monarchs were in danger and had to be adequately guarded but, since that no longer applies, I think we

might see a little less of the pomp and circumstance of regiments, and so on, surrounding the King and Queen, and a little more faith and trust put in the people as a whole. I have mentioned the way in which Court ceremonial has been greatly relaxed over the last half century, and I am sure that tendency will continue, but, if you entirely relaxed what might be called the discipline of public processions, you might get the mob losing their heads and hysteria resulting in the Royal party being surrounded. For that reason it is, perhaps, necessary to keep a strong guard upon Their Majesties wherever they go. The hon. Member also made a forcible point about advice being given to Their Majesties by members of parties not forming part of the Government. That is a point of such importance that already it has caused two elections. I need not remind the hon. Member of the story of the ladies of the Bedchamber, when Lord Melbourne was very much to the forefront, and there have been other occasions. I should very much hesitate to put any check on Their Majesties as to the friendships that they might form, but, as far as the political side of it goes, they must be advised by the Government of the day. They may choose their friends from any set they like but, as far as political matters go, let them take the advice given by the Government of the day.

8.32 p.m.

Sir Archibald Sinclair: I have listened with great pleasure to the speech just delivered, with which I very largely agree, but in this, as in previous Debates, I have been struck with the astonishing air of unreality which has pervaded the discussion. It seemed to me that the hon. Member for Camlachie (Mr. Stephen) introduced an atmosphere of reality into the discussion. He has a real position which I understand. He is a Republican, and he also believes in hospitals. I think it is a mistake to mix up hospitals with the Civil List, just as I should think it a mistake to move a reduction, we will say in the Navy Estimates, to strike out a destroyer and insert a school. The two things do not work together. Nevertheless, I quite understand the hon. Member's position. It is a very real point of view, though one with which I disagree. But, when I come to the position of hon. Members


above the Gangway, their attitude is one of unreality and illusion. There is not the slightest substance in the arguments which they address to the House. The hon. Member for Caerphilly (Mr. Morgan Jones) referred again to the 1931 episode. That was described at greater length by the Leader of the Opposition, who said that there was a constant stream of influences which suggested that the country was being ruined by masses of people getting unemployment benefit when they did not deserve it and did not need it. If King George was informed to that effect, obviously he was informed by his own Ministers, who introduced the Anomalies Act, which was designed to deal exactly with that position. It was the Measure of the Labour Government, for which they were responsible, and obviously they had to give such advice as was described almost in the terms which the Leader of the Opposition used, that people were getting unemployment benefit when they did not deserve it, and did not need it. That was the case for the Anomalies Bill.

Mr. Morgan Jones: The right hon. Baronet has completely missed the point that I made. My point was that the political representatives of the Labour party had transferred their allegiance to the other side and there was, therefore, no politician who could explain to the King what our point of view was.

Sir A. Sinclair: Let me deal with these points in succession. I am dealing first with the Leader of the Opposition, who made a very similar point on a previous occasion, and made it first. Now the hon. Member says that "the King was surrounded by certain constitutional advisers and they unfortunately broke with the party to which I belong, and, therefore, I could not submit my views to the King." That is a matter which I leave him and his party to decide among themselves. There were certain constitutional advisers responsible to His Majesty the King for advising him, and who gave him advice of which the hon. Member disapproved, but we really cannot blame His Majesty the King or the present arrangement for maintaining contact between the executive Government of this country and the King. His second point was the assertion that the King is surrounded by an exclusive social circle.
He said that the times which people on this side of the House had spent with the Royal Family in the aggregate would not amount to more than 24 hours, and also, what a handicap to impose upon the Royal Family. The first thought which occurs to me is that the Royal Family seem to have surmounted the ordeal triumphantly and never was the Crown more broadly based on the affections of the people than it is at the present time.

Mr. Morgan Jones: That is a monstrous distortion. I did not imply that it was a handicap to the King not to have had more than 24 hours' conversation with us. What I meant was that it was an injustice that because of that limited intercourse with us he was not enabled to understand the point of view of the people whom we represent.

Sir A. Sinclair: The relations between the King and the masses of the people at the present time seem to indicate clearly that the Royal Family understand the people and that they are very well understood by the people. The hon. Member did say that it was a handicap to impose upon the King, and I say that it is a handicap that he has surmounted. It is a mistake to think that the King is surrounded, as the hon. Member said, with an exclusive social circle with standards of extravagance and luxury. I know people who are comparatively poor and without any such standards and who live in a very simple way who, are honoured by the friendship of the King and the Royal Family. It is unreal to make these assertions that the King has no friends except those whose standards are extravagance and luxury. It is not in accordance with the facts. The Leader of the Opposition referred the other day to the fulsome adulation with which the King was addressed and the refined servility of the newspapers and the B.B.C. Whatever we may think of the events of last December, the then Monarch certainly suffered neither from fulsome adulation nor refined servility from the newspapers. That, again, is an assertion which bears no relation to the facts as they are in the knowledge of every hon. Member of this House and of most of the people outside. While that is so, we would all agree—I think we all have agreed in every part of the House on previous occasions and I am sure we still agree—that there is a constant move


towards greater simplicity at the Court. It is a movement which we all desire to encourage.
The hon. Gentleman the Member for South Nottingham (Mr. Markham) referred to the fact that ordinary clothes are now worn at many State functions, and I have no doubt that that will be increasingly so. I am not sure that I agree that people should go only in ordinary clothes. I think that there are occasions of pageantry in which people take great interest, and there is, on these occasions, everything to be said for people wearing clothes suitable to the occasion. There was one gentleman of whom, I am aware who came from a great Dominion to this country and who was challenged before he came, "Will you wear Court uniform if you go to Buckingham Palace?" His answer was, "When I was a policeman I wore the uniform of a policeman, when I served in the War I wore the uniform of a soldier, and when I go to Court I shall wear the uniform of the Court." That is a very sensible point of view, which commends itself to the masses of the people and to this House.

Mr. Markham: The uniform was not borrowed.

Sir A. Sinclair: If a great many people cannot afford to buy expensive uniforms, I do not think that it is wrong to hire them. It is not immoral or wrong for anybody who cannot afford to buy a uniform which is very expensive to hire it; it is a very reasonable thing to do. However that may be, there are occasions when pageantry and uniforms are useful and good and please and are in accordance with the wishes of the people, but there are a great many other occasions on which they are unnecessary, and I am sure, as the hon. Member himself said, there are more and more occasions being provided when people can approach the Throne and come in contact with the Royal Family wearing their ordinary clothes. I am sure that that is the wish of all in this House, and of the present King and the Royal Family.

Mr. Stephen: Does the right hon. Gentleman suggest that it is suitable that the uniform should be worn at Court one night and at an amateur theatrical party the next night?

Sir A. Sinclair: They are not allowed to furnish for theatrical purposes uniforms

which are official uniforms. They have to make a change in the uniforms before they can be supplied. But that does not, in fact, happen, and, personally, I do not think it ought to be made difficult for people of poor means to wear the official dress of the rank or appointment which they happen to hold when they go to Court. Therefore, I strongly support the Civil List, which seems to be a reasonable one, in the hope and belief that progress will be made in the direction which the whole House, irrespective of party, desires, of greater simplicity and of easier access to the Throne.

8.44 p.m.

Mr. Silverman: I do not desire to detain the House for more than a very few moments, but in view of the last two speeches it is perhaps not undesirable that the matter should be put in the light more in accordance with what is desired by those who have moved certain Amendments from this side during the various stages of the Bill. I am all for reality in these discussions. I understand that the whole purpose for which these Amendments were being moved and divided upon was that there should be introduced into all these matters a greater degree of reality than has so far obtained. I do not think, if I may say it with respect to the right hon. Gentleman the Member for Caithness (Sir A. Sinclair), that the cause of reality is very efficiently served by commencing a speech with an attack on the lack of realism on the part of those pleading for greater simplicity, and then concluding it by himself supporting it and saying that everybody else in the House desires it.

Sir A. Sinclair: Everybody desires it.

Mr. Silverman: If everybody in the House desires it, then we are entitled to be supported and not to have ridicule poured on the attempt that is being made from these benches to bring about something that everybody desires.

Sir A. Sinclair: I did not in the least attack the desire for simplicity. I have consistently expressed strong sympathy with it. What I said was unreal was the idea that there were vast and powerful influences keeping the Throne away from the masses of the people and interfering with the exercise of their constitutional functions. That was what I described as an atmosphere of unreality.

Mr. Silverman: I am delighted to hear that the right hon. Gentleman was not making an attack on us, and hon. Members will believe me when I say that I accept his assurance, but I understood from what he said that there was something unreal in the position of those who speak from these benches, as distinct from the attitude of the hon. Member for Camlachie (Mr. Stephen). The right hon. Gentleman said that it was an understandable and intelligible position to say that you are a Republican and that you object to all these things, but that it is unreal to say that you support a constitutional Monarchy and yet attack this sort of thing.

Sir A. Sinclair: The hon. Member continues to misrepresent me. The talk is that there is encircling the Throne some great force which is keeping the Monarchy from contact with the masses of the people and from exercising its functions.

Mr. Silverman: When the right hon. Gentleman reads his speech in the OFFICIAL REPORT he will see that I am not in the least misrepresenting what he said. Of course, if what he said misrepresented what he meant to say and what he now says, I can assure him that I accept what he says, but other hon. Members I feel sure understood him to be drawing a distinction between the complete intelligibility of saying you are a Republican and therefore you do not want all this parade and show, and saying you are a supporter of a constitutional Monarchy and yet you desire it to be simplified in various respects, one of which has been referred to by the right hon. Gentleman. On the Republican point of view it has been ruled that we should be out of order in attempting on this occasion to discuss the relative merits of Republicanism and Monarchy. We are not being asked to discuss any such thing. Our point is that, seeing that we have a constitutional Monarchy, it should be presented to the people in a more simple way. If the right hon. Gentleman supports us in that endeavour, then I hope he will be in the Division Lobby with us in order that a further attempt shall be made, if possible, to inquire into the process of making the thing more simple, and how that simplicity might be expedited.
Let me say to the hon. Member opposite that, as a new Member of this House, I am not in a position to judge of the accuracy or otherwise of some of his

reminiscences, but I suggest to him that they do not matter in the least. This question does not depend on whether some hon. Members on this side or on the other side who accept invitations to certain places can go in ordinary dress, or whether they prefer to hire a costume more in accordance with what is usually worn there. We should get greater simplicity in Court life by making what is an occasional concession to the poor relation the accepted rule. The concession is somewhat on these lines: "Since you are in Parliament and have been elected by the people to represent a section of society, and since you cannot afford or do not choose to wear the uniform of the Court, you may come in some other kind of dress." I am not suggesting that that is not a concession of value and that it does not, as far as it goes, make for greater simplicity, but that is not the point that we are pressing. We are asking that this exception which has been made by way of concession shall cease to be an exception or a concession, but shall become the rule. Whether we are right or wrong in that view is a matter on which there may be two opinions, but do not let us confuse the issue by misunderstanding or misrepresenting it.
It is idle to say that the Court circles, at other than exceptional times, are not drawn from one social circle. Nobody ever said, as far as I know, that the King never had friends outside that social circle or never had a friend who was a poor man. What has been said with incontrovertible accuracy is that the habitual mode of life and the habitual social atmosphere and attitude which a Civil List of this kind fosters is such that the Monarch for the time being a handicap conditions of ordinary living by ordinary men and women. It puts upon the Monarchy for the time being a handicap in understanding what are the social reactions of the ordinary civilian on any grave financial, economic or social question. It is not and never has been denied that the Monarch has made heroic attempts to overcome that obstacle and to bridge that gulf, with varying degrees of success, but the obstacle and the gulf remain and ought to be abolished, and the way to do it is to simplify the whole procedure so that it shall cease to be representative of one class of society, and become more representative of the general ideal and mode of life.
I am not entering into a discussion on the relative merits of Republicanism or a constitutional Monarchy, but I do say that the great strength of a constitutional Monarchy is when it seeks to attune itself to the common life of the common people. In so far as they do that, they are strong, and, in so far as they fail to do that, they are weak. We say that in a Civil List of this magnitude you cannot hope to bridge the gulf which everybody knows does exist. If you want the constitutional Monarchy to remain strong the proper way to achieve that is to make the mode of Court life and the whole of the social atmosphere in which the Monarch moves, not less dignified but much more simplified. It was claimed that the ideal of all of us is to have a classless society, and that we are all working towards that end with a varying degree of speed. The mode of life of the Court and its entourage should be less redolent of class consciousness and of the social influence of a particular type than it is, and a great step in that direction would be the sort of inquiry that we have asked for, in order to see in what manner and by what means that greater simplicity can be attained.

8.55 p.m.

The Financial Secretary to the Treasury (Lieut.-Colonel Colville): Hon. Members who have listened to the Debate must be quite clear as to the reason why the Amendment to reject the Bill has been moved. It was not that hon. Members opposite really wish to negative the Civil List as a whole, and I think they would be very surprised if their Amendment were accepted. They wish to put forward the point of view so moderately expressed by the hon. Member for Caerphilly (Mr. Morgan Jones) in his opening speech; that there should be a simplification of the style and state of the Court. That point of view was put forward by the Labour Members on the Select Committee, was discussed and negatived. The hon. Member for Caerphilly opened his speech by emphasising that he and his friends did not wish to show any disrespect to the Monarchy or to the Throne, but to ensure that in a democratic country the Monarch should not be remote from the people. That is a sentiment with which everyone will agree, and I give the hon. Member and his friends credit for hold-

ing that view. I hope he will give us credit for holding our view equally sincerely, that it would not strengthen the hold which the Monarchy has on the hearts of the people of this country to cut down the necessary measure of pomp and circumstance which surround it.
Apart from the finding of the majority of the Select Committee, we believe that we are interpreting the view of the majority of the people also. The hon. Member for Camlachie (Mr. Stephen) put his point of view, but did not elaborate it by going into detail and, therefore, I do not think he would wish me to answer his point in detail. But I would say this, that it is not without significance that the great city of Glasgow in which his constituency is situated was one of the most beflagged cities on a recent occasion. That was hardly due to a love of colour and pageantry. It is a fact of deep significance, which I hope will not be lost upon the hon. Member. As regards the actual amount of the Civil List, it shows a decrease of £37,000 on the Civil List as fixed in 1910, despite the altered values of money, increased wages and salaries and establishment charges. I should like to emphasise this point. It should not be forgotten that while we are spending much larger sums of money now on social services, the necessary requirements of the State in relation to the former Civil List show a decrease. I feel that the point of view which hon. Members have expressed is out of touch with the feelings of the majority of the people of this country, who do not desire a curtailment of the present standards which surround Royalty in this country. It was the view expressed very well in the words of the Resolution adopted by the Select Committee:
Whereas the liberties of the people and the integrity of the Empire are deeply rooted in the Constitutional Monarchy, and whereas the ancient usages, ceremonies and traditions centering upon the Crown have become, even more than in former times, a bulwark against dictatorship, and the symbol of the union of all members of the British Commonwealth of Nations, we hereby affirm that we do not desire any changes in the style and establishment of the Sovereign and his Family other than those which His Majesty may himself see fit to make from time to time.
That was the view of the majority of the Select Committee. It is the view of the majority of this House, and I think of the majority of the country.

9.1 p.m.

Mr. Gallacher: We have heard much about reality and unreality. In a previous discussion the right hon. Member for Caithness (Sir A. Sinclair) said that we were all working for a classless society. The most unreal, the most absurd of unrealities is to use such a phrase and have the conception of Monarchy associated with it. We cannot discuss a classless society in such a loose way as that. We are discussing the simplification of the Court. I am all for simplification. I want to see it carried to such a stage that the whole business will be simplified out of existence. That is the logical outcome of simplification. The right hon. Member for Caithness said that all this pomp and circumstance made an appeal to the masses of the people, that they liked to see it. Why do they like to see it? Why do we get the streets littered with bunting and colour? It is because the lives of the masses of the people are so barren and devoid of beauty that when they have a chance to get some colour in the streets they take advantage of it. How can the right hon. Gentleman possibly talk about realities and then say that the people like to see him dressed up in some fancy uniform? If they do like to see the right hon. Gentleman dressed up in some fancy uniform it means that there is something wrong, that they are not getting the opportunities they should.
The Financial Secretary has referred to the love of the people for the Monarch, for the occupants of the Throne. We have been getting a surfeit of that. He told the hon. Member for Camlachie (Mr. Stephen) to take a note of what had happened in his constituency. Let him take note of what he himself said—that we shall not strengthen the position of the Monarchy amongst the people if we take away the pomp and show. What is it he is saying? He is really saying that it is not the King and Queen, not persons, but the pomp and show which the people are concerned with. The Financial Secretary is telling the truth maybe for the first time. Is any hon. Member going to tell us that it is right to keep the people of this country in a state where they are attracted by unreality? Do hon. Members want people to be in the condition that they are so barren of beauty, life and culture that they must have somebody who goes to a costumier, gets a fancy dress and comes

out and makes a parade? One hon. Member talked about an hon. Member on this side who had borrowed plumes.

Mr. Magnay: Is the hon. Member referring to me?

Mr. Gallacher: I did not know the hon. Member was present. I am not very ready to accept these stories because I am myself the victim of a feeble-minded journalist who seems to have borrowed plumes and tried to plant them on me. The point I wanted to raise was that in an earlier discussion on the Civil List Bill the hon. Member for South Kensington (Sir W. Davison) said that my opinions and language were abhorrent to hon. Members. I wonder what he imagines his opinions and those of his colleagues are to me. I wonder whether he ever thinks of what I have to suffer sitting here.

Mr. Deputy-Speaker: I must remind the hon. Member that we are now on the Third Reading of the Bill and that all he can discuss is what is in the Bill. I am not aware that either his language or that of the hon. Member for South Kensington is in it.

Mr. Gallacher: I will bow to your Ruling, although I would have liked to make a few more remarks on that particular matter. The question that is before the House is the simplification of the monarchy. Let us face realities. The reality is that we have a monarchical institution that is hedged around with pomp and circumstance and that money is being provided to maintain a monarchical institution which represents all the power and influence of the great wealthy and reactionary families in this country. Never mind all the nonsense about the Royal Family going around and seeing people and that sort of thing. Built around this institution are all these evil reactionary forces. The Labour party proposes—and I have certain sympathy with it—that all these aristocratic and reactionary evil influences should be done away with and that the monarchy should become a nice, respectable petit bourgeois monarchy.

Mr. MacLaren: And should join the Labour party?

Mr. Gallacher: The other night I made a proposal that it should become a proletarian monarchy, but nobody seemed


to be very ready to support that proposal. The question before hon. Members is whether they are to continue spending enormous sums of money in the vain hope—for it is a vain hope—that they can get that secluded circle to continue everlastingly. It will not be done. The Labour party is providing a very easy, sensible and efficient method of putting an end to what sooner or later will become not only a serious anomaly but a serious menace to the public life of this country. It would be very advisable not from my point of view but from the point of view of right hon. and hon. Members opposite, to accept that proposal, to take the intelligent method of modifying gradually this incubus—I am not referring to the Royal Family alone but to the system that is built all round it—and of bringing the Royal Family more and more into the ordinary life of the masses of the people, and gradually of seeing it disappear. That would be the easy way of solving this problem.
Therefore, I suggest to the Government that they ought to give the most serious consideration to this proposal. Because there has been a great deal of bunting, because people have taken advantage of

an opportunity of a free day or a free night or some extra excitement in their dull and sordid lives, it is all wrong for the Government to think that this is something which will remain constant and that there will always be toleration for this luxury on the part of parasitic drones. When discussion starts in the country about the way in which the Cabinet have run away from the tax on profits and when that is discussed alongside the enormous expenditure which is being made in order to keep up this pomp and circumstance, it will be seen that the masses of the people will begin to make a very quick turn. I ask the Government to accept the proposal put forward by the Labour party to introduce complete simplification in the sense of removing entirely from the life of this country all these aristocratic, wealthy influences which have been built up and which, through various methods, seek not only to control the Throne, but to control and determine the Government of this country.

Question put, "That the word 'now' stand part of the Question."

The House divided: Ayes, 199; Noes, 123.

Division No. 200.]
AYES.
[9.14 p.m.


Acland, Rt. Hon. Sir F. Dyke
Croom-Johnson, R. P.
Heilgers, Captain F. F. A.


Allen, Col. J. Sandeman (B'knhead)
Cross, R. H.
Hepworth, J.


Anderson, Sir A. Garrett (C. of Ldn.)
Crowder, J. F. E.
Higgs, W. F.


Anstruther-Gray, W. J.
Cruddas, Col. B.
Hills, Major Rt. Hon. J. W. (Ripon)


Apsley, Lord
Davison, Sir W. H.
Holmes, J. S.


Aske, Sir R. W.
Dodd, J. S.
Hope, Captain Hon. A. O. J.


Baldwin-Webb, Col. J.
Dugdale, Captain T. L.
Hopkinson, A.


Balfour, G. (Hampstead)
Duggan, H. J.
Horsbrugh, Florence


Balfour, Capt. H. H. (Isle of Thanet)
Duncan, J. A. L.
Hudson, Capt. A. U. M. (Hack., N.)


Balniel, Lord
Eastwood, J. F.
Hulbert, N. J.


Barclay-Harvey, Sir C. M.
Eckersley, P. T.
Hume, Sir G. H.


Beamish, Rear-Admiral T. P. H.
Edmondson, Major Sir J.
Hunter, T.


Beaumont, M. W. (Aylesbury)
Ellis, Sir G.
Hurd, Sir P. A.


Beaumont, Hon. R. E. B. (Portsm'h)
Emery, J. F.
Inskip, Rt. Hon. Sir T. W. H.


Birchall, Sir J. D.
Erskine-Hill, A. G.
James, Wing-Commander A. W. H.


Blair, Sir R.
Evans, D. O. (Cardigan)
Jones, Sir H. Haydn (Merioneth)


Blaker, Sir R.
Fildes, Sir H.
Jones, L. (Swansea W.)


Bossom, A. C.
Findlay, Sir E.
Kerr, Colonel C. I. (Montrose)


Boulton, W. W.
Fremantle, Sir F. E.
Kerr, J. Graham (Scottish Univs.)


Brown, Col. D. C. (Hexham)
Furness, S. N.
Keyes, Admiral of the Fleet Sir R.


Bull, B. B.
Fyfe, D. P. M.
Lamb, Sir J. Q.


Burgin, Rt. Hon. Dr. E. L.
George, Major G. Lloyd (Pembroke)
Lambert, Rt. Hon. G.


Campbell, Sir E. T.
Gibson, Sir C. G. (Pudsey and Otley)
Latham, Sir P.


Carver, Major W. H.
Gluckstein, L. H.
Leckie, J. A.


Cary, R. A.
Goodman, Col. A. W.
Lees-Jones, J.


Cayzer, Sir H. R. (Portsmouth, S.)
Gower, Sir R. V.
Lennox-Boyd, A. T. L.


Chamberlain, Rt. Hn. N. (Edgb't'n)
Grant-Ferris, R.
Levy, T.


Channon, H.
Gridley, Sir A. B.
Lewis, O.


Chapman, Sir S. (Edinburgh, S.)
Griffith, F. Kingsley (M'ddl'sbro, W.)
Liddall, W. S.


Christie, J. A.
Grimston, R. V.
Llewellin, Lieut.-Col. J. J.


Clarke, Lt.-Col. R. S. (E. Grinstead)
Guinness, T. L. E. B.
Loftus, P. C.


Cobb, Captain E. C. (Preston)
Gunston, Capt. D. W.
Lovat-Fraser, J. A.


Colfox, Major W. P.
Guy, J. C. M.
Lyons, A. M.


Colville, Lt.-Col. Rt. Hon. D. J.
Hacking, Rt. Hon. D. H.
MacAndrew, Colonel Sir C. G.


Cooper, Rt. Hn. T. M. (E'nburgh, W.)
Hanbury, Sir C.
McCorquodale, M. S.


Courthope, Col. Rt. Hon. Sir G. L.
Hannah, I. C.
MacDonald, Rt. Hon. J. R. (Scot. U.)


Cox, H. B. T.
Harbord, A.
MacDonald, Rt. Hon. M. (Ross)


Croft, Brig.-Gen. Sir H. Page
Harris, Sir P. A.
Macdonald, Capt. P. (Isle of Wight)


Crooke, J. S.
Haslam, Sir J. (Bolton)
McEwen, Capt. J. H. F.




Maclay, Hon. J. P.
Ramsbotham, H.
Stuart, Hon. J. (Moray and Nairn)


Macmillan, H. (Stockton-on-Tees)
Ramsden, Sir E.
Sutcliffe, H.


Magnay, T.
Rankin, Sir R.
Tasker, Sir R. I.


Maitland, A.
Rathbone, J. R. (Bodmin)
Tate, Mavis C.


Makins, Brig.-Gen. E.
Reed, A. C. (Exeter)
Taylor, C. S. (Eastbourne)


Mander, G. le M.
Reid, Sir D. D. (Down)
Taylor, Vice-Adm. E. A. (Padd., S.)


Margesson, Capt. Rt. Hon. H. D. R.
Reid, W. Allan (Derby)
Thomas, J. P. L.


Markham, S. F.
Roberts, W. (Cumberland, N.)
Thomson, Sir J. D. W.


Mayhew, Lt.-Col. J.
Ropner, Colonel L.
Titchfield, Marquess of


Mellor, Sir J. S. P. (Tamworth)
Ross, Major Sir R. D. (Londonderry)
Tufnell, Lieut.-Commander R. L.


Mills, Major J. D. (New Forest)
Ross Taylor, W. (Woodbridge)
Turton, R. H.


Morgan, R. H.
Rowlands, G.
Wakefield, W. W.


Morrison, G. A. (Scottish Univ's.)
Samuel, M. R. A.
Walker-Smith, Sir J.


Morrison, Rt. Hon. W. S. (Cirencester)
Seely, Sir H. M.
Wardlaw-Milne, Sir J. S.


Muirhead, Lt.-Col. A. J.
Selley, H. R.
Waterhouse, Captain C.


Munro, P.
Shaw, Captain W. T. (Forfar)
Wedderburn, H. J. S.


Neven-Spence, Major B. H. H.
Shepperson, Sir E. W.
Wells, S. R.


O'Neill, Rt. Hon. Sir Hugh
Sinclair, Rt. Hon. Sir A. (C'thn's)
Wickham, Lt.-Col. E. T. R.


Ormsby-Gore, Rt. Hon. W. G. A.
Smiles, Lieut.-Colonel Sir W. D.
Williams, H. G. (Croydon, S.)


Orr-Ewing, I. L.
Smith, Bracewell (Dulwich)
Winterton, Rt. Hon. Earl


Owen, Major G.
Smith, Sir R. W, (Aberdeen)
Womersley, Sir W. J.


Palmer, G. E. H.
Somerset, T.
Wood, Hon. C. I. C.


Peake, O.
Somerville, A. A. (Windsor)
Wragg, H.


Peat, C. U.
Spens, W. P.
Young, A. S. L. (Partick)


Perkins, W. R. D.
Storey, S.



Petherick, M.
Stourton, Major Hon. J. J.
TELLERS FOR THE AYES.—


Plugge, Capt. L. F.
Strauss, E. A. (Southwark, N.)
Lieut.-Colonel Sir A. Lambert Ward


Radford, E. A.
Strauss, H. G. (Norwich)
and Major Sir George Davies.


Raikes, H. V. A. M.
Strickland, Captain W. F.





NOES.


Adams, D. (Consett)
Griffiths, J. (Llanelly)
Potts, J.


Adams, D. M. (Poplar, S.)
Groves, T. E.
Price, M. P.


Adamson, W. M.
Hall, G. H. (Aberdare)
Pritt, D. N.


Alexander, Rt. Hon, A. V. (H'lsbr.)
Henderson, A. (Kingswinford)
Quibell, D. J. K.


Ammon, C. G.
Henderson, J. (Ardwick)
Richards, R. (Wrexham)


Anderson, F. (Whitehaven)
Henderson, T. (Tradeston)
Ridley, G.


Attlee, Rt. Hon. C. R.
Hollins, A.
Ritson, J.


Banfield, J. W.
Hopkin, D.
Rowson, G.


Barnes, A. J.
Jenkins, A. (Pontypool)
Salter, Dr. A. (Bermondsey)


Batey, J.
Jenkins, Sir W. (Neath)
Sexton, T. M.


Bonn, Rt. Hon. W. W.
Jones, A. C. (Shipley)
Shinwell, E.


Broad, F. A.
Jones, Morgan (Caerphilly)
Short, A.


Bromfield, W.
Kelly, W. T.
Silkin, L.


Brown, C. (Mansfield)
Kennedy, Rt. Hon. T.
Silverman, S. S.


Brown, Rt. Hon. J. (S. Ayrshire)
Kirby, B. V.
Simpson, F. B.


Buchanan, G.
Kirkwood, D.
Smith, Ben (Rotherhithe)


Burke, W. A.
Lawson, J. J.
Smith, E. (Stoke)


Cape, T.
Leach, W.
Smith, Rt. Hon. H. B. Lees (K'ly)


Cassells, T.
Lee, F.
Smith, T. (Normanton)


Charleton, H. C.
Leonard, W.
Sorensen, R. W.


Cluse, W. S.
Leslie, J. R.
Stephen, C.


Clynes, Rt. Hon. J. R.
Logan, D. G.
Stewart, W. J. (H'ght'n-le-Sp'ng)


Cooks, F. S.
Lunn, W.
Taylor, R. J. (Morpeth)


Cove, W. G.
Macdonald, G. (Ince)
Thorne, W.


Cripps, Hon. Sir Stafford
McEntee, V. La T.
Thurtle, E.


Daggar, G.
McGhee, H. G.
Tinker, J. J.


Dalton, H.
MacLaren, A.
Viant, S. P.


Davies, R. J. (Westhoughton)
Maclean, N.
Walker, J.


Davies, S. O. (Merthyr)
Marshall, F.
Watkins, F. C.


Dobbie, W.
Maxton, J.
Watson, W. McL.


Dunn, E. (Rother Valley)
Messer, F.
Wedgwood, Rt. Hon. J. C.


Edwards, Sir C. (Bedwellty)
Milner, Major J.
Welsh, J. C.


Fletcher, Lt.-Comdr. R. T. H.
Montague, F.
Westwood, J.


Frankel, D.
Morrison, Rt. Hon. H. (Hackney, S.)
Williams, D. (Swansea, E.)


Gallacher, W.
Morrison, R. C. (Tottenham, N.)
Williams, E. J. (Ogmore)


Gardner, B. W.
Muff, G.
Wilson, C. H. (Attercliffe)


Gibbins, J.
Nathan, Colonel H. L.
Windsor, W. (Hull, C.)


Gibson, R. (Greenock)
Noel-Baker, P. J.
Woods, G. S. (Finsbury)


Graham, D. M. (Hamilton)
Oliver, G. H.
Young, Sir R. (Newton)


Green, W. H. (Deptford)
Paling, W.



Greenwood, Rt. Hon. A.
Parkinson, J. A.
TELLERS FOR THE NOES.—


Griffiths, G. A. (Hemsworth)
Pethick-Lawrence, Rt. Hon. F. W.
Mr. Whiteley and Mr. Mathers.


Question, "That this House do now adjourn," put, and agreed to.

Orders of the Day — CHAIRMEN OF TRAFFIC COMMISSIONERS, ETC. (TENURE OF OFFICE) BILL.

Considered in Committee, and reported, without Amendment; to be read the Third time upon Thursday.

The remaining Orders were read, and postponed.

Orders of the Day — COST OF LIVING.

Motion made, and Question proposed, "That this House do now adjourn."—[Sir A. Lambert Ward.]

9.26 p.m.

Mr. Tinkers: I want to take this opportunity of raising a point of which I gave notice to-day. I had a question down to the Prime Minister asking him to give a day to discuss the increased cost of living in relation to low income such as unemployment benefit and old age pensions. The reply of the Prime Minister was that Parliamentary time could not be given, and seeing that we have now an hour and a half it would be folly on my part to press the Prime Minister for a day if I did not take an opportunity such as this. Therefore, I want to call the attention of the House to the hard position of a large number of our people. To-day the House has been moved on the question of profits. The Chancellor has in mind that large profits and excess profits are being made which he thinks ought to be taxed. Nobody questions that. One remark of the Chancellor proved it when he said that approximately £600,000,000 to £700,000,000 profits were made annually. One cannot grumble if he tries to extract from that £25,000,000 for the purpose of revenue. Large profits are being made, and it is expected that further large profits will be made owing to armaments and the boom in trade. Increased profits have a relation to the increased cost of living.
It will not be questioned that in the last two years the cost of living has materially increased. There is a difference as to the amount; some say 12 per cent., some say 15 per cent. We can strike a fair average at about 10 per cent. My point is that the increased cost of living imposes a great burden on those with fixed incomes. The unemployed man and his wife get 26s. a week. With the cost of living up by 10 per cent. that is

brought down by more than 2s. If they get 30s. a week, 3s. has to be taken from the amount. Taking the old age pensioners, who are among the hardest cases we have at the present time, a man and his wife get £1 a week. Take 2S. from that, and they are left with 18s. a week. In this House quite recently we have been dealing with increased salaries and the arguments put forward to sustain the increases have included the increased cost of living, and it has been admitted that some regard should be had to that. But nobody seems to have any regard for the class of persons I have mentioned, and yet they form a large proportion of our community. At times of prosperity such as the present we ought to have regard to all classes. The wage earner, though it may come rather late in the day, will get an increase some time or other. He will share in the improvement to a certain extent, but these people on fixed incomes cannot share in the improvement, which involves an increased cost of living, unless there is a common move to do something for them.
Anyone who moves among these people cannot but be moved with pity by their plight. They are in dire distress in regard to clothing and footwear, which they have no chance of replenishing. Even on the question of food these people on fixed incomes have difficulty in getting the ordinary things of life. It is quite common to see them going to the cheapest shops to try to make their money go further. If hon. Members want to find out the social conditions of our people, they should not go to their constituencies and meet a selected group of people, but they should go to the market place late on Saturday night and find out who are the people who go there to buy the odd lots. That is the real test of how the community is living. If they do that and experience what I have experienced they will find that it is the unemployed, and, even worse than that, the aged people who are looking round the stalls and waiting until a vendor, to clear his stall, says that he has a cheap lot which people can have for a few pence. You see these ragged people come forward and take what they can as far as their money goes. I asked one or, two of them once why they were there. I was told that they got £1 a week, and that their rent was 6s. a week. They had to try


to make the 14s. go as far as they could, and they went to the market on Saturday night to try to buy sufficient food to last the week.
I am almost appalled when the Budget Debate is on and hesitate to take part. One of my friends was thinking of raising the question of pensions, but was overawed because we got on to what is termed high finance, and he felt that if he brought pensions forward he would almost be ruled out. I want to give one or two instances where money could be usefully spent in this direction. There are 1,600,000 people out of work at present. If I separate that figure into 1,000,000 males and 600,000 females, we may arrive at some useful conclusions. Anyone seeing these people will realise that they are never able to get decent clothes, and if this House could only see its way to grant them extra payment so that they could buy a decent suit of clothes a year, they would be doing a good thing in that direction. What would the amount be? We have been talking about £1,500,000,000 and £400,000,000, and the Chancellor said to-day that the Budget cost for armaments had gone up about £74,000,000 and that another £70,000,000 was being found by what is called capital expenditure.
If we tried to devote some of this money to these poor people, it would be much better for the country and would provide much more useful employment than if it were spent on armaments. If we were to provide 1,000,000 men with a suit of clothes each a year, at an average cost of £2 l0s., it would only come to £2,500,000, and if we were to provide the women each with an extra dress at a price of, say, Li a dress—and anybody knows how women like to dress decently and have more pride than men in that direction—it would add another £600,000. Then everyone should have a pair of shoes. There is no worse sight in winter time than that of down-trodden people without a decent pair of boots. It is almost a tragedy. Give them a pair of boots each, which could easily be done in this time of large profit-making. Then there is the question of food. Quite easily every family that I have mentioned could do with l0s. a week more money for spending on food.
These items that I have mentioned would come to between £40,000,000 and

£50,000,000 annually, which would go a long way towards increasing the standard of living of these families, and yet this afternoon, knowing very well that there is going to be an increased cost of living for the next 12 months or even longer, no regard is paid to these classes of people. If we want to enjoy the confidence of these people and to give them contentment, we shall have to face this question at some time, and in our heart of hearts we ought to have sympathy for them. I know that most of us here come from the working-class movement and have seen the drudgery of their lives, and many of our people have experienced it. I cannot say that I have myself in that acute form, as I have always been employed, but one is bound to be moved with sympathy for those who suffer in that way, and so I think the House ought to-day to give time to examining this question and to seeing whether the case which we put forward has anything behind it.
The hon. and gallant Member for the Isle of Thanet (Captain Balfour) tried to compute that the cost of living had not gone up, and probably that notion is in the mind of other Conservative Members as well. All that I ask is an examination of these matters, and when we have proved our case, that the cost of living has gone up in the last two years, it should follow that the increase for which we are asking should be given to these people. If I fail and am not able to sustain my argument that the cost of living has gone up, my case goes by the board. All that I desire is an examination of this question and to find from the Government whether there is any justification for my claim that those with low fixed incomes are suffering in comparison with other people. If I am wrong in that, I shall be quite willing to withdraw it, but if I am right. as I believe I am—and I am assured by everyone who goes to these shops for their food and clothing that there has been an increase in the cost of living—then, in fairness to these people, we ought to see them given something on their present income. I trust that the Government will pay attention to what we say and try to do something in this direction.

9.40 p.m.

Sir Percy Harris: The hon. Member for Leigh (Mr. Tinker) has raised a subject of urgent and immediate importance,


and it is unfortunate that there is not a Minister present to give attention to what he has raised.

Mr. Tinker: I do not want to blame the Government for that, because they did not know there would be such an early Adjournment Motion.

The Parliamentary Secretary to the Treasury (Captain Margesson): Owing to the fact that it was not until a quarter past eight that we received notice that this question would be raised on the Adjournment Motion, it was not possible to arrange for a Minister to be present. The hon. Member for Leigh (Mr. Tinker) understood perfectly that there would be no Minister present to reply to him, but, of course, I will report what he has said to the Minister concerned.

Sir P. Harris: I was going to say that I assumed that in this case the Government were not sufficiently warned owing to the unexpectedly early Adjournment Motion. The hon. Member for Leigh has raised issues that are of immediate importance. Rightly or wrongly, there is considerable unrest, especially among the working women. The men do not realise the tendency of prices to rise so rapidly as do those who have to spend the money. The ordinary working man with a home gets his pay and hands over the balance to his wife, and it is on her that the responsibility for making both ends meet falls. I know that there is a great and growing discontent at the rapid rise in the prices of many articles of general use. I do not refer merely to food, but to things like pots and pans and to clothes generally. It falls particularly heavily on the poorer sections of the community, on the unemployed, the partly employed, and the lower scale of wage earners, and I think the suggestion made that there should be an investigation of the whole problem is worthy of consideration.
As we have on the Treasury Bench the right hon. Gentleman who is, after all, the biggest power behind the Throne, the Patronage Secretary, who really makes the puppets do their jobs, I think he should convey to the Minister responsible that this is a matter of urgent importance. We have a new Prime Minister and a reshuffle of the Government and perhaps the Ministers will do better in their new homes. We

have new blood drawn from the various sections which support the National Government, and we hope, therefore, that the hon. Member's point, so well put, will receive the grave consideration of the Government.

9.44 P.m.

Mr. Kelly: I want to thank the hon. Member for Leigh (Mr. Tinker) for having raised this question, particularly as not only was his question not answered satisfactorily to-day, but during the course of the Debate last evening this matter of the cost of living was raised and hon. Members opposite denied that there had been an increase of 1s. 8d. in the£. Discussing it with one of the Members who had taken part in the Debate last evening, I found that he was raising a quibble in regard to it, and that he realised to the full that the cost had been increased by 1s. 8d. in the £ so far as food was concerned. He denied it because the hon. Member who was then speaking had mentioned the whole cost of living. I would ask the Patronage Secretary to pay regard to those people who are in receipt of old age and widows' pensions. I sometimes try to find out how these people manage to live on 10s. per week, even when the husband and wife together are receiving 20s. One has only to consider what it costs for the simplest and roughest food to realise how difficult it is for these people to live on the pension. I do not know how widows manage on 10s. a week to bring up children, even allowing for the few shillings they get for them. One wonders how they manage to carry on in these days with rents at the level we know them to be and with food and clothing at their present prices. We asked more than once from these benches that during the celebrations for the Coronation something extra might be given to these people, but even that was denied them.
Not only should there be an investigation into the rise in the cost of living, but we should consider, at a time when we are talking of increasing the salaries of Cabinet Ministers, increasing the amount paid in pensions. We have been hearing to-day of profits from industry ranging from six to seven hundred million pounds. Surely we ought to be able to find enough in this country for those people who have grown old in the service of industry and commerce an income sufficient to enabie them to live in comfort and ease in the


eventide of their days. It is not creditable to us and something of which we ought to be ashamed that these veterans of industry are asked to exist on l0s. a week. Any Government that neglects those who have rendered such service to the community, and does not make an effort to give them a pension adequate for a reasonable standard of life, is not doing its duty to itself, to the country or to humanity.

9.50 p.m.

Mr. James Griffiths: We are indebted to the hon. Member for Leigh (Mr. Tinker) for taking advantage of the Adjournment Motion to raise this important question. I want to supplement the appeal, perhaps the most pathetic appeal that could be made, on behalf of the growing army of old people who are faced with the problem of trying to eke out an existence on a miserable l0s. a week. I hope that serious note will be taken of what has been said to-night and conveyed by the Patronage Secretary to the responsible Minister as an expression of feeling of hon. Members on all sides of the House. It must be nearly 12 months since we had a hectic time in the House debating the regulations and scales submitted by the Unemployment Assistance Board. It will be remembered that it was the second attempt made by the board and the Government to fix scales and regulations. The first were withdrawn. Then there was a gap and we were told that the board spent a good deal of time in considering in the then circumstances what were the scales required for the maintenance of a man and wife, and for single men and children.
Eventually new scales were brought forward and they were adopted by the House. We have the right to assume that those scales were fixed by the board after mature consideration and were regarded by the Government as adequate at that time. We denied that from these benches, but the Government accepted them as being sufficient, with the cost of living as it was, to maintain the unemployed in some kind of subsistence. I want to urge, therefore, that if those scales were adequate then they cannot possibly be adequate now. If 26s. a week for a man and wife was deemed to be the proper allowance 12 months ago it cannot be regarded as sufficient now because it is

worth in real values only 24s. On the Government's own argument, therefore, 26s. is not now enough. We said at the time that the scales were inadequate. We did not accept them and we say that they are now in real values substantially less. Ten shillings for a single man living at home is less now that it was when the regulations were brought in. One of the most pathetic cases is that of a single man who is a lodger and gets 15s. a week. If he had to pay 15s. for board and lodging 12 months ago, what working-class family could afford to board him for that amount now?
I suggest that the Government should relate the scales which were laid down last year to the present cost of living and to increase them according to the increase in the cost of living since June, 1935. Everybody says that it is desirable that the price level should increase and all our efforts are designed to raise the price level. That means that the pound buys less and less every Friday as the weeks go round, and, therefore, the fixed allowances of these poor people, the aged worker and his wife who have to depend upon their miserable 10s., the unemployed and everybody who is dependent upon fixed allowances ought to he increased. I hope that what has been said this evening will be conveyed to the Government, because I would remind the Patronage Secretary that every Member, I think, on these benches has put questions on this subject, and I myself have asked the Minister of Labour whether the Unemployment Assistance Board would review their scales of 12 months ago in the light of the changed circumstances and the increase in the cost of living. In closing these remarks I would warn the Patronage Secretary that we shall take every opportunity of bringing this question forward, because we believe that it is our primary duty on these benches to lose no chance of bringing before the attention of the House the plight of these people.

9.57 p.m.

Mr. Higgs: We have heard of increased profits and the increase in the cost of living, but we seem to forget that there is always a lag between the two. The increase in profits occurs first and then the cost of living rises. We get the opposite effect when profits are reduced. The cost of living decreases, but wages do not fall at the same rate. I think we must all appreciate the sincere manner


in which this discussion was opened, but I have taken advantage of this opportunity to make a few remarks in order to put the view of the industrialists. I do not think the State should be held to be entirely responsible for the maintenance of all people over the age of 65. Up to a few years ago there was no old age pension at all. I am not suggesting that the present pension is enough, but I am saying that the State cannot afford to do anything more at the present moment. We hear of the £800,000,000 profit which industry is making, but I am afraid those who criticise that £800,000,000 profit fail to realise that it is the nucleus of trade expansion. They seem to think that it goes into the pockets of the employers and that they spend it on their own recreation, but really a great proportion of it goes into the expansion of industry and finds additional employment for the workers. It replaces wear and tear. Since 1929 or 1930 wages have been the same as they were then, while the cost of living is reduced 8 per cent.
It is impossible to consider this question over a short period of time. We are not disputing that the cost of living is rising, but it is absolutely impossible to vary the wage return from week to week to keep in step with the cost of living. A nucleus of profit is absolutely essential to industry, which has to have it for expansion and in order to find further employment. I am not making these remarks with the object of opposing what the opener of this discussion has said, because I see his point of view, but when it comes to expecting the State to pay more than it is paying it has to be remembered that that money would have to be found somewhere, and in the present state of taxation I, for one, think it is impossible to increase the amount of the old age pension at the present moment.

10.0 p.m.

Mr. Shinwell: I should not like it to be thought that this is a matter for my hon. Friends on the back benches alone. The hon. Member for Leigh (Mr. Tinker), in initiating this Debate, reflected the opinion of every Member of the Labour party, and not only of the Members of the Labour party but of a very large section of the community who are not usually associated with the working classes. While we are primarily concerned with the interest of the wage earners, and particularly the

lower-paid wage earners, and those who are in receipt of old age pensions and unemployment allowances, I would remind the House, and in particular the Patronage Secretary, so that he may be good enough to convey it to his right hon. Friends in the Government, that a large section of the community, those who are on fixed incomes, are similarly affected. We are particularly entitled to raise this important matter because the Government do not seem to have in contemplation any steps to arrest the rise in the cost of living. It is indisputable that there has been an increase, but to the complaints which have been made by my hon. Friends only one answer has so far been vouchsafed, and I seem to detect it in the speech of the hon. Member for West Birmingham (Mr. Higgs), namely, that wages have responded to those increases.
It is not true that wages have increased in recent years in proportion to the increase in the cost of living. If the right hon. Gentleman representing the Government takes the contrary view, then we invite the investigation of the question, as my hon. Friend the Member for Leigh has demanded, and we are willing to abide by such conclusions as may be reached. Irrespective of the position of the wage earner, and the allegation that wages have followed the cost of living, we direct attention to the fact that those in receipt of unemployment allowances have had no increases whatever. My hon. Friend the Member for Llanelly (Mr. J. Griffiths) was right in his assertion that when the unemployment allowances were fixed 12 months or so ago the cost of living was less than it is now. I recall a speech made by the right hon. Member for the Scottish Universities, the late Lord President of the Council, in 1931, when the National Government was formed. I remember it particularly because I took part in the Debate.

Mr. J. Griffiths: He broadcast it.

Mr. Shinwell: No doubt he broadcast it afterwards. He stated that if the cost of living increased then, clearly, unemployment allowances must respond. Something was said about a previous reduction of 10 per cent. in the cost of living and which formed the basis of the National Government's contention that unemployment allowances should be correspondingly reduced. It was clearly in their


mind that the cost of living was associated with the scales of unemployment allowances. If that was true, it must remain equally true now. We are accordingly entitled to ask that the Government should pursue inquiries into this matter. We allege that the cost of living is going up and will go up further, and that there is clearly a case for the revision of unemployment allowances. There is a still stronger case in respect of those who are in receipt of the very meagre pittance of 10s. a week for the old age pension. There is no social reform that would be more highly valued than an increase in old age pensions.

Mr. Deputy-Speaker: That is a matter which cannot be done without legislation.

Mr. Shinwell: I am aware of that, Mr. Deputy-Speaker, and I am obliged to you for reminding me of it and calling my attention to it, but I used it merely as an illustration to fortify our call for an investigation into the whole subject. I do not propose to ask the Government to amend the legislation affecting old age pensions, because I know that this is not the proper occasion on which to do so; but I and my hon. Friends are asking that the increase in the cost of living should be arrested, if that alternative is not within our reach. This is not the first time that we have raised this question in the direct form. In an indirect form we raised it on the question of malnutrition, and we have raised the matter on several occasions. What answer has been forthcoming? The hon. Member for West Birmingham (Mr. Higgs), whom I did my best to keep out of the House by making speeches during the by-election—I regret my failure—seemed to think that the State ought not to come to the assistance of certain people unless—

Mr. Higgs: I said that the State should not be responsible for solely maintaining people over the age of 65.

Mr. Shinwell: We have not asked that the State should be responsible for exclusively maintaining those who have reached the age of 65. There are sections of the community who have done very well and who, having reached the age of 65 and over, are quite well able to maintain themselves. They are in the category described by the hon. Member, those who have made profits. Others are in

receipt of adequate pensions or come within various superannuation schemes operating in industry. The hon. Member must recognise, as, indeed, every hon. Member on the opposite benches recognises, that private industry is not in the least reluctant to approach the State and demand assistance NA hen this is regarded as necessary. Over and over again we have heard demands from hon. and right hon. Gentlemen, representing, big business interests, that the State should come to their assistance. If that is a legitimate demand, surely a demand that comes from the impoverished section of the community is more legitimate.
The State has an obligation in this matter. The Government's tariff policy, their armament programme and the speculation consequent upon it and what is called profiteering or, at all events, excessive profit-making, are contributory factors in the increase in the cost of living. The Government have to show whether there is to be a further increase or whether the present increase can be arrested. On these matters the Government cannot remain silent. This is an important social issue and it may become an important political issue before long. I beg the right hon. and gallant Gentleman most earnestly to convey to his colleagues in the Government the essential need that exists for meticulous examination of the whole problem. This is not merely a party question, although we raise it as a party. but it is a national question. I beg him not to regard the Debate as one of those impromptu Debates that occur at convenient opportunities on the Adjournment, when Members take advantage of the time at their disposal, but as a serious Debate conveying a serious request, and that he should treat it in that light. If the Government fail to respond, the matter will be raised repeatedly, and the country will be fully advised, both of the action of the Government and of our intentions in the matter.

10.13 p.m.

Mr. Leonard: I think it will be agreed that sufficient has been stated already to warrant our considering this as a matter of major importance. I trust that the Patronage Secretary will have in mind the possibility of more comprehensive study being given to the matter and of it being discussed with all the facilities of the


House at our disposal. I do not desire to enter any argument with the Member for West Birmingham (Mr. Higgs) as to the lag between retail and wholesale prices nor the lag between wages and falling prices, for the hon. Member for Leigh (Mr. Tinker) has presented to the House to-day the problem of the people who cannot wait and who have to attend to things from day to day and week to week. Because of that, we cannot expect the problem to be looked at in the same way as other problems that balance one six months against another six months. Further, I would like to point out that the time is long overdue when the method of computing the cost of living figure should be reviewed. The basis of calculation used at the present time, with its various weightings, dates back to 1904, and it is unfair to assume that great changes have not taken place since that time even in working-class homes, in regard to what is necessary to maintain a decent life. A fortnight ago I met an artisan getting on in life, who happens to live in a part of my constituency where many other artisans occupy houses. He finds that his locality has been fortunate in that a great number of people who used to be in the same unemployed state in which he is have got jobs, but he spoke to me in terms which showed clearly that he felt that he was being left behind. Others were going on to conditions of life that he had longed for during his unemployment, but he was left at the dead level of unemployment pay as it is at present. There are hundreds in the same position, and I think that some regard should be paid to them.
My hon. Friend the Member for Leigh made reference,to the advantage, meagre though it be, that accrues to the very poor in England from the fact that they have a certain amount of facilities for cheap buying in the form of weekly markets, but few towns in Scotland, if any, have such markets. and even if they had they have no facilities for keeping food, so that those who may have an extra shilling to spare can lay it out on commodities than can be eked out over the forthcoming week. I would like to draw the attention of those who are responsible for conveying information to the Government to the fact that that advantage does not exist in Scotland to any great extent, if at all. The single-apartment house and the room-and-kitchen house in

Scotland do not afford any facilities for keeping food. There are hundreds, if not thousands, of houses in Scotland which are so constituted that the food which the people buy has to remain on the table until it is consumed; there are no cupboards in which to put it; and, therefore, the people could not take advantage of a weekly market even if there were one. They are, therefore, forced to the expedient of buying commodities once and twice a day, and, when they do that, they must perforce buy in very small quantities. The result is that the incline upwards in the cost of living is much steeper for these poor people, who must purchase their food once and twice a day, than it is for those who are able to purchase at less frequent intervals. I trust, therefore, that the Government will not consider this problem as one of weeks that people can make up at some other time; it is a day-to-day problem for the very poor, and I trust that it will receive the consideration for which my hon. Friend the Member for Leigh has pressed.

10.19 p.m.

Mr. Sexton: I take it that the cost of living includes the rent which poor people have to pay, the food which they have to buy, and also the clothes and bedding which they have to buy. I am not allowing anything for leisure; I am putting them down on the bare standard on which the National Government has kept them for so long. Ten shillings a week a year or two ago is now only worth about 9s. If you try to divide that 9s. among the four items I have mentioned, rent, food, clothes and bedding—and the cost of living includes clothes, food and bedding—you find that there is very little for these people to live on. A rent or 3s. a week—and you cannot get a house for much less than that—leaves only 6s. for food, clothes and bedding. These poor people, the veterans of industry, who have have given the best of their lives for the community, have to scratch along on meals costing about 1½d a time. Every time the old woman buys two ounces of tea or the old man buys his half ounce of tobacco. the taxes on those commodities go toward paying the allowances under the Civil List.
We have just passed a Civil List in which one child gets £6,000 a year. The widow's child is valued at 5s. a week. One child is worth 400 times as much as


the other If you go to the worker and ask him if he thinks his child is worth only one-four-hundredth part of the child of the Palace, he will indignantly deny that the child of the Palace is worth any more than his. The cost of living has a great deal-to do with the standard of life. That stendard is already far too low in millions of cases. Experts consider that 50s. for a family of three is barely enough, but in my division I have men with families of three, four and five children working for 30s. and 31s. a week. How can they live honourably and decently? At the same time we have it from that Box that £600,000,000 or £700,000,000 are going to be made in armaments profits. It is the State's job to safeguard the country against its enemies, and the enemies are not all outside the country. There are many inside. For the enemies outside there is plenty of money to be got—£1,500,000,000 to defend the country against outside enemies and meagre pittances to defend the poor against poverty, distress and misery. I am glad to have had the opportunity of adding my voice in urging the Government to take into consideration this question of the rising cost of living compared with the miserable pittances paid to the old people and to the workers' children.

10.24 p.m.

Mr. A. Jenkins: Some weeks ago I put down a question to the Minister of Labour asking if he intended to take any action to deal with the rates of unemployment benefit and assistance in view of the rising cost of living. The reply was to the effect that he saw no reason at all why he should take any action. I gave notice that I would raise the question on the first available opportunity, and I am glad that it has been brought forward. I regard it as of very great importance. In view of the large numbers that one comes in contact with in districts where unemployment is high, there is a very great need to deal with the rates of benefit in view of the increased cost of living. I have tried to work out the effect of the rates of unemployment benefit on the increase in the cost of living since the rates of benefit were fixed. The cost of living in July, 1934, was 41 per cent. and in April, 1937, it was 51 per cent., an increase of 10 per cent. What is the effect of that upon the rates of unemployment benefit? A man and Wife in

July, 1934, received 26s., and they receive the same rate to-day. What is the purchasing power of that 26s. to-day compared with its purchasing power in July, 1934? It is 2S. 7d. per week less, and for an unemployed family dependent upon 26s. a week, that sum is of tremendous importance. It is useless for the Minister to say that he sees no reason for inquiry into this matter. There is the reason—2s. 7d. per week. Take the case of a man, wife and child. In July, 1934, they received 28s., and at present they receive 29s. They are 2s. worse off.
One can go through the whole scale and find that these rates of unemployment benefit have so much less purchasing power now than they had before the increase in the cost of living. The hon. Member for Llanelly (Mr. J. Griffiths) made a reference to the question as to whether or not these rates were adequate. It has never been contended in this House or anywhere else, as far as I know, that the rates of unemployment benefit or of unemployment assistance are adequate for maintenance. I listened to the hon. Member who recently came to this House—

Mr. Speaker: This Debate is getting very much out of order, It is obvious that unemployment benefit cannot be increased without legislation, and that being so, it is not in order on the Adjournment.

Mr. Jenkins: I understood that this discussion was to take and that an effort was to be made to give the reasons why there should be a proper inquiry into the rates of Unemployment Benefit, and that is what I am seeking to do. I am endeavouring to advance some reasons why we should have an inquiry into the rates of Unemployment Benefit to find out whether or not they are adequate for maintenance. I think that it will be accepted in this House that Sir John Orr is a very great authority on the amount of income that is necessary to maintain a family. He is gentleman who, as everybody knows, has devoted a very considerable part of his life to the study of food and family requirements. I want to make one or two references to an article written by him giving some comparisons between this country and other countries, showing the effect of low income upon the standard of health, physique and upon the death rate. He says quite clearly, in an article published


in "Reynolds" on 23rd May of this year:
The children of the poorest class of 14 years of age are two or three inches shorter than the children of the well-to-do classes. Infantile mortality is higher. In the wealthier classes it is only about 30 per thousand, among the poorest 5,000,000, it is over 100 per thousand, and in the poorest slums in this country it reaches 150 per thousand.
Thirty lives are lost in the better-off homes, but in those homes where conditions of the most extreme form of poverty prevail, the number of children who die is 150 per 1,000. These are appalling figures, and any Government doing their duty to the State in an effort to protect life would do everything that lay in their power to bring down the 150 to somewhere in the region of 30. We are sometimes very inclined to be proud of our own country, but Sir John Orr quotes figures from other countries, and it may be as well if we give some consideration to them. He refers to Australia and New Zealand where the death rates are between 30 and 50 per 1000, compared with 57 in England and 82 per 1000 in Scotland. He deals with towns. Per-haps the towns are the most effective comparisons that he makes. He refers to Oslo, where the city council has taken upon itself the responsibility of seeing that every child in the city is provided with an adequate amount of food:
Take Oslo, for example. Both housing and feeding have been radically improved. This is the town where they have what is called the famous Oslo breakfast. Every child in the town, rich or poor, can have at school a breakfast of protective food, which brings its diet up to near the new standard. In addition, mortality in Oslo which was 36 in 1931 is now n to 30, compared with 67 in London, 84 in Newcastle and 102 in Glasgow.
Could there be any more convincing proof of the need for an inquiry into the loss of life of these young children? Could there be any greater reason as far as purchasing power is concerned than that which I have given in regard to 26s. a week? I do not think that it is possible to advance any stronger reasons, and if the Government will not act upon reasons of that kind, if their attitude was expressed in the reply of the Minister of Labour to me when he said that he saw no reason for an inquiry, then, clearly, things are not going to get better as far as these people are concerned, but very much worse. I am very glad to have

had the opportunity of saying a word on this question, because I regard it as being of very great importance, and, in view of the continued increased cost of living, it is going to be a serious matter for this country.

10.33 p.m.

Sir Stafford Cripps: We had earlier this evening a very remarkable demonstration of the subservience of the Government to pressure from outside. The Prime Minister was forced to come before the House with a speech of excuse and apology, because during the last week or so the whip has been cracked in the City of London. He has withdrawn the proposal which he flaunted in his Budget speech. I very much fear that in regard to this far more important problem which we are discussing tonight the Government will not be so willing to act as they were when their master's voice spoke to them.
There are one or two matters to which I should like particularly to make reference with regard to this problem. The first is the question of the cost of living index figure. Unfortunately, to-day there are many people who are quite unable to ascertain the facts as regards the cost of living. The old index which was compiled in 1904 was always open to a good deal of criticism because of its method of compilation and the method used in collecting the statistics which, in fact, yield the monthly figures that are published. After a lapse of 33 years it has become so anachronistic and out-of-date that statisticians as a whole are unwilling to rely upon them. In an article in this week's "Economist" dealing with the rise in prices, the writer finds himself forced more or less to disregard the cost of living index figure because of its unreliability. The habits of the people have changed, one hopes for the better, to a more healthy dietary during the last 33 years, and probably the most remarkable feature of that change has been the large increase in the consumption of fruit and fresh vegetables, the price of which in many cases is rising rapidly. Such articles as tomatoes and oranges are at the present moment much more expensive than they were a short time ago.
If we are ever to tackle this problem, one of the first necessities is to get absolutely reliable information upon the


problem. Not long ago I spoke of the necessity for a statistical department to be set up by the Board of Trade to inquire into the industrial statistics of the country, but it is equally important that we should have a really first-class statistical service as regards the social life of the country in order that the House and the public should have the means of judging these important problems. The article in the "Economist" to which I have referred points out the extremely rapid rise of wholesale prices in the course of the last few months, and notes that the rise in the cost of living has so far been comparatively slight compared with the great rise in wholesale prices, but it forecasts that in the near future retail prices must come into closer relationship with wholesale prices. That is to say, we are going to reach a period of even a more rapidly rising cost of living than at the present moment. It is not only a question of the foodstuffs and materials needed for the household, but there are in many districts particular problems as regards the rise in the cost of living. Let me instance one.
A fortnight ago I was in the southern parts of Scotland, and in all the places I visited I met protests against the rise in rents, which were as much as from £6 to £11 per year per house. That is an additional factor in the cost of living in those areas, and a factor which bears extremely hard on those who find themselves living in municipal houses in a district like Lanarkshire which is still suffering from unemployment, with these ridiculous and fantastic low rates of assistance upon which to live. This problem of the rise in prices without any proportionate rise in the money received by large masses of the consumers in this country will become one of the great problems in the course of the next few months or years in this country. I hope it will become one of the foremost political problems, because it is primarily a political matter. I say that for this reason. Those who are wage-earners in industry have at their disposal at least the industrial weapon; that is to say, when the pressure of prices grows more than can be tolerated, they are able to take industrial action by which they hope to be able to obtain, and in certain circumstances do obtain, some amelioration of their financial position; but the unem-

ployed, the old-age pensioners, the persons on workmen's compensation cannot by industrial action get any amelioration of their lot.
Their struggle, such as it is, must be on the political field, or else they must be left without any opportunities of getting any advancement. Such persons as those to whom I have referred are today having to live upon standards which do not enable them to provide themselves and their dependants with sufficient nourishment to preserve them in a state of health, far less in a state of happiness. In my view, it must become, and I hope it will become, a prime political matter for those on this side of the House, if others do not take it up, to see that in those circumstances incessant pressure is brought to bear, not only on the Government in this House but on the public outside as well, to make the realisation of this fact far greater than I believe it is to-day.
As part of that, I think that it was an excellent suggestion of the hon. Member for Leigh (Mr. Tinker) that there should be an inquiry which would make public these matters throughout the country. We have no fear of the results of that inquiry. The results of it will be inevitable once the Government are prepared to make public and to make clear what are the facts. At the present time, as one so often hears in debate, the whole issue can be confused by discussion as to whether this or that figure is accurate, whether there has been a rise of 1s. 8d. or 2s. 6d. in the cost of living, and so On. We want to get the accurate facts, because the more accurate they are the greater our case upon them will turn out to be. Therefore, although I am afraid it is unlikely, I hope the Government will take steps at least to make available to the people accurate facts upon which the people will be able to judge of the merits of the claim of those who are to-day suffering from this excessive poverty to get some immediate amelioration of their lot.

10.44 p.m.

Mr. Louis Smith: I have listened to a number of sincere and sympathetic speeches on this difficult matter, and I would like to say that hon. Members on all sides of the House have equally in mind the lot of those who are the less fortunate in this country. One realises that naturally the cost of living affects those


who have the least means much more than it does those who are somewhat better off, but I would remind hon. Members that although during the last 12 months the cost of living has admittedly advanced—I believe by four points—it has not advanced in 1937 any higher than it was in 1930 relative to the base line on which we previously worked. I feel that this is a matter which must be considered from the standpoint of the money available for increasing either pensions or the rates of assistance to the unemployed, and the House will agree that it is, unfortunately, very difficult for the country to find any greater amount for social services than is being found now when the defence of our homes requires so much more than it did a few years ago. I think even hon. Members opposite will realise that the present Government have done as much as any Government in respect of the social services.

Mr. Speaker: The only thing which keeps this Debate in order at all, is the argument that there should be an inquiry, but the hon. Member is now going far beyond even the demand for an inquiry.

Mr. Smith: I have no objection to an inquiry, but it seems to me that it would be useless to have an inquiry into the matter if the country's financial position is such that it would not allow of additional assistance being given to these people if it were recommended. During the last three or four years, I would point out, wages have considerably increased and there are nearly 2,000,000 more people in employment now than there were three or four years ago. I think it is agreed that an old age pension of l0s. a week is not looked upon as enough to maintain the person receiving it, but if wages have increased as much as they have increased, and if so many more people are at work, there is far more money available in working-class homes for the support of the old. As I say, I have no objection to an inquiry being made, but it does not seem to me to be of any service to hold an inquiry at a time when the financial position of the country is such that we would not be able to find the money needed for any extension of these services. I think that when we have gone through the present period and when we have found the money which is urgently required now

for the defence of the country, then will be the proper time to go into these matters and I have little doubt that in those circumstances this Government would find the means to help the people who have been referred to and would continue that work for the social services which they have done so thoroughly during the last few years.

10.49 p.m.

Mr. Garro Jones: The hon. Member for Hallam (Mr. L. Smith) appeared to overlook the fact that our motive in raising this question is the protection of those who live on fixed incomes. It is true that we are equally, if not even more concerned with the plight of those who live on wages, but the immediate object of an inquiry such as has been suggested would be to ensure measures being taken to deal with the case of those dependent on fixed incomes. The hon. Member appeared to recommend a very strange course. Because the Government in his view would not be in a financial position to apply the remedy, we must not, according to him, seek to ascertain the extent of the evil. That would appear to be burying one's head in the sand. I have had occasion recently to examine the relationship between wholesale and retail prices in a particular case. This, in my view, is one of the most serious questions that confronts us at present. I wonder if hon. Members are aware that the price of fish, for instance, is more than l00 per cent. above the pre-war price in the retail market, but is more than 25 per cent. below the pre-war price in the wholesale market.
That is typical of a great many of the relationships between wholesale and retail prices, and part of the reason for that discrepancy is that whereas you have an enormous power of organised buying superimposed on the producer to keep down his wholesale price, the consumer has no such organised power to keep down the retail price, and therefore we may well find that this delicately poised retail price may suddenly take a lurch upwards to the extreme discomfiture both of the people on fixed incomes and those on wages. Therefore, it seems an elementary political precaution that the Government should apply itself to ascertaining the extent of the evil and to organising measures for dealing with it.
The public are not quite so ill-informed on this question as they have been in years gone by. Hon. Members who travel about the country addressing meetings and keeping in touch with their constituents will know that the public are aware of the fact that all the improvements in amenities and wages which are the result of long struggles can be filched from them by this insidious and unseen rise in the cost of living, and of all taxes, hardships and expenses this unseen creeping upwards of the cost of living is one of those which bear most hardly on thrifty people all over the country. If hon. Members only realised what a difference it makes to a man receiving £2 5s. or £3 a week if the cost of living rises one or two points, they would be with us in demanding this inquiry.
Only a couple of weeks ago I went to speak in one of the mining villages. The chairman, a man of the finest type of coalminer, invited me to take a cup of tea with him. I went and found the usual neat, well-arranged, miner's cottage. After tea we started discussing his wages. I said, "What have you received in the last year or two?" He said, "Of course, as usual, we get free coal, but I have been fortunate. I have been working full time for the last two years, but in no one of those weeks with the exception of two or three have I received a figure greater than £2 5s. a week." On that he had to keep his wife and family, and in the weeks in which he did not receive £2 5s. he received under £2 because they had not worked full time. Imagine the almost intolerable burden on a home like that if the cost of living rises by two or three shillings a week. For the hon. Member for Hallam to say that the resources of this country are mortgaged so heavily for armaments that we shall not be able to meet the difficulty even if we realise its extent, shows a lack of appreciation of the fundamental sources of strength and unity in this country. What is the use of building up armaments if all the time you are undermining the health and strength and unity of the nation? Therefore I would add my small voice to that of the hon. Member for Leigh (Mr. Tinker) in pressing on the Government that they should ascertain the extent of this evil.

10.55 p.m.

Mr. George Griffiths: I desire for a few moments to take part in this discussion. I was very much surprised at the Prime Minister's answer this afternoon, and his attitude to the question of the hon. Member for Leigh (Mr. Tinker). He was very cold and short, and gave us the impression that the Government had not time to bother with this. He gave us the impression that they had something bigger than this on at the present time. I do not think there is anything in the British Isles or in the world that is bigger than looking after the people who produce the wealth. I go to my division every week-end and mix among my people, and I want to put three cases. The first is that of a cousin of mine, who has been a widow for some 15 years and whose children have grown out of getting their share of a combination of a widow's pension. That woman has just turned 50 and has had all her pension taken from here until she is 55. There are something like 200,000 people in the British Isles who have been receiving pensions and then, because the children have grown out of being entitled to pensions, they have had their pensions cut off. The hon. Member for Leigh asks that people of that type should have consideration, but the Prime Minister cannot give them time.
Coming out of the street in which I live yesterday morning, leaning over a gate in the street were two men who had worked in the coal mines for 55 years, and they said to me, "George, tha's 'ad an increase in thy wages this last week. See if tha can do a bit for us. Ten bob is nowt for us chaps." That is not something in Germany or America, but in my division this Monday morning, when I was catching the train to come here, and the Prime Minister says, "Well, we cannot give much attention to that." I am sorry I was not in while the hon. Member for Hallam (Mr. L. Smith) was talking. He always throws his weight against holidays or any increase for the working class. If we are after holidays, the capitalists cannot afford them. If we want anything on pensions, they say, "We cannot afford that, although we can afford £1,500,000,000 in five years for the manufacture of armaments." The amount that the men who get hurt in


industry get is a standing disgrace to the country. A man who gets injured in industry is looked upon to-day in the British Isles as one of the biggest criminals. [An HON. MEMBER: "Why?"] If he is earning £3 a week on an average—and our chaps do not get that now—he will get a maximum of 30s. compensation when he gets hurt. They say, "Why did you get hurt, you scoundrel? You should not have got hurt, and because you have got hurt we will cut your income into two, and you shall have 30s. instead of £3."

Mr. Wragg: Absolute nonsense.

Mr. Griffiths: It may be nonsense to the hon. Member, who does not understand it, but I have had some of it. I have had it in this hand and in my leg. I have had weeks and weeks of it myself, and I say that, practically speaking, the man who gets hurt only gets half his wages. Is not that taking half the income out of the house? Is not that the law of the land? If it is nonsense on my part, it is nonsense on account of the law of the land.

It being Eleven of the Clock, the Motion for the Adjournment lapsed, without Question put.

Question again proposed, "That this House do now adjourn."—[Captain Margesson.]

Mr. Griffiths: When the clock struck I was about to refer to a nystagmus case and compensation. This man had been suffering from nystagmus for five years and was getting 21S. compensation. He was paying 10s. 6d. out of that for rent. He partially recovered and the colliery company offered him a light job. The man got part compensation, and because the company has been working a little more regularly during the last few weeks the compensation was cut down to 4s. 1d. The man is receiving 7s. 9d. per day working on the surface and he worked last week three days—

Mr. Speaker: The hon. Member is arguing for an amendment of the Workmen's Compensation Act. That would require legislation and it is obviously out of order on the Adjournment.

Mr. Griffiths: I want to support the hon. Member for Leigh (Mr. Tinker) who is asking for an inquiry.

Mr. Speaker: The inquiry is getting a very large one. Hon. Members might ask for an inquiry into everything under the sun, and if I allowed on the Adjournment a discussion on an inquiry, there is no reason why any subject could not be raised. There would be no end to it. It is quite out of order on the Adjournment.

Mr. Griffiths: This is a proposal for an inquiry into the cost of living as it affects unemployment, old age, and fixed incomes for such things. I how to your Ruling, Mr. Speaker, but I submit that I am not far out of order when I raise the case of this man who has a fixed sum of 4s. 1d. a week because, if there is an inquiry into the cost of living the question of compensation must be raised.

Mr. Speaker: In the question of the hon. Member for Leigh (Mr. Tinker) I do not see anything about an inquiry. He is asking for a day to discuss this question.

Mr. Griffiths: I bow to your Ruling, Sir. I will come up some other day.

11.5 p.m.

Mr. Wragg: I should not like what was said by the hon. Member for North Aberdeen (Mr. Garro Jones) to go forth from this House without contradiction. He must know if he gets the returns of the Mines Department that it is impossible for a miner to earn as little as 45s. a week if he is working full time. I just wished to make that correction, because I think it is wrong that such a statement should be made.

Mr. Garro Jones: May I say—

Hon. Members: No.

Mr. Garro Jones: I have not spoken on this Motion for the Adjournment. It is a new Motion. I want to say to the hon. Member that I will provide him with the name and address of this man and of the colliery at which he works and a copy of the ascertainment upon which the wage was based.

11.6 p.m.

Mr. J. Griffiths: The hon. Member for North Aberdeen (Mr. Garro Jones) said that when he spoke to this man he asked him, "What do you bring home?"

Mr. Wragg: And what the man brings home most depend on what he earns?

Mr. Griffiths: The man said, 'I have not brought home more than £2 5s. a week during the last 12 months, and there have been more occasions when I have brought under£2." The hon. Member has been quoting from the returns of the Mines Department, which show the gross wage and not the net wage which the man brings home.

Mr. Wragg: It was not the gross wage. I have not included in that wage the value of allowances in kind and it was

admitted that the man got free coal. I say it is absolutely impossible for any miner working six shifts a week to get less than 45s.

Mr. Speaker: We cannot have a further discussion on this.

Adjourned accordingly at Eight minutes after Eleven o'Clock.